Inside the rapidly changing world of compliance

The U.S. Department of Labor’s independent contractor final rule eluded — temporarily, at least — lawsuits seeking to block it ahead of its effective date, giving rise to several compliance questions for employers, attorneys told HR Dive.

DOL’s rule introduces a “totality-of-the-circumstances” framework for analyzing independent contractor relationships under the Fair Labor Standards Act. In doing so, the agency said it will consider six nonexhaustive factors, including the nature and degree of control over work performed, the extent to which the work is an integral part of the employer’s business, and the permanence of the arrangement.

Years of legal battles preceded the final rule’s publication. Initially, the Biden administration sought in 2021 to rescind a prior independent contractor final rule issued by the Trump administration, but a federal district court judge ruled against DOL and put the Trump-era rule back into effect.

On appeal, the 5th U.S. Circuit Court of Appeals issued a stay of the judge’s decision. Then, last month, the 5th Circuit vacated the lower court’s opinion and lifted the stay following publication of the latest final rule, teeing up future litigation. 

Separately, independent contractors sued DOL in Georgia and Louisiana seeking a preliminary injunction of the new final rule, with the latter case filed just prior to the weekend before the rule’s March 11 effective date.

However, none of these efforts appeared to block the rule from taking effect.

Enforcement: ‘It gives them something new to point to’

Employers have nonetheless had several weeks to prepare for the independent contractor rule. Lucas Asper, shareholder at Ogletree Deakins, told HR Dive that among his clients, those that have been most interested in discussing the final rule have been preparing for some time now.

“The ones most heavily dependent on [independent contractors], or at least [those whose] business model already uses that work structure, those folks have been laser focused on this from the time the proposal first came out,” Asper said. “We’ve all known that this was coming eventually.”

DOL’s six-factor test may be a shift for employers, but Asper said that the reality is that the test is very similar to what employers have dealt with in years past, including the Trump-era final rule. That rule emphasized two “core” factors in its analysis of independent contractor relationships, whereas the new rule “says we’re going to look at everything,” he continued.

For employers, the rule’s biggest effect may be that it signals wage-and-hour investigators’ focus on worker misclassification, Asper said; “It gives them something new to point to.”

Time will tell on court challenges

Though the lawsuits challenging DOL’s final rule did not hold it up in the courts, that does not preclude an injunction from being issued at some future point, Christopher Parlo, partner at Morgan Lewis, told HR Dive. In the meantime, there are a few things employers can do to ensure their independent contractor arrangements withstand potential scrutiny.

For example, Parlo said employers can craft question and answer documents to proactively address inquiries from independent contractors who perform work for their organizations, which may be a necessity given the increased publicity given to the final rule this week. “The management at the company should be aware of what those questions would be,” Parlo said.

Additionally, employers should look over independent contractor documentation to ensure that the associated provisions do not suggest employee status, he continued. For instance, employers should avoid terms that imply the services that a contractor performs constitute an “exclusive” relationship.

Employers also should ensure that they are not paying for independent contractors’ expenses, Parlo said, and they could consider adding arbitration agreements with class-action waivers to their independent contractor agreements. The latter might allow employers to face potential challenges on an individual basis instead of a class-action basis, he noted.

DOL’s final rule includes control over performance of work as a factor in the independent contractor analysis, so employers may want to consider adding language to contracts to make clear that they are not only not exerting such control, but also that they have affirmatively given up that ability entirely. “That’s what’s supposed to be happening, but writing it out in a contract is important,” Parlo said.

ERISA plan and employee benefits implications

Though the final rule is a FLSA regulation, its effects may be felt across other aspects of employment law. One such area is employee benefit plans governed by the Employee Retirement Income Security Act, said Sarah Sise, partner at Quarles & Brady.

That is because prior federal court rulings have held that eligibility to participate in an ERISA plan is based on how employers classify potential participants, rather than on a common law standard, Sise said.

Should an employer reclassify independent contractors as employees in order to comply with the final rule, she continued, that could also make such workers eligible for ERISA plan coverage. If the employer fails to do so, it could face penalties.

“It’s just understanding the classifications so that a year from now, we don’t have corrections to make because we improperly excluded someone [from an ERISA plan],” Sise said. “That’s going to be a big gotcha.”

Parlo agreed ERISA-related coverage is a potential concern for employers and said that employers may want to consider reinforcing language in their agreements stating that independent contractors are not entitled to such coverage, or to other benefits such as vacation time, leave time, bonuses or attendance at company events.

“If you use language that says you are not eligible to participate in our [ERISA] plans even if a court or agency later determines that you should have been an employee, that’s enforceable,” Parlo said. “A court or agency cannot force you to retroactively put them into your plans. It’s not a fix for everything, but it is important.”

The Supreme Court of the United States issued a unanimous decision in Groff v. DeJoy, significantly limiting the ability of an employer to argue that a requested religious accommodation would cause it an undue hardship.

In short, the Supreme Court held that the correct standard for an employer to establish an undue hardship is not “more than a de minimis cost,” but rather whether the burden of the requested accommodation “is substantial in the overall context of an employer’s business.”

The 5th Circuit is the first federal circuit court to apply Groff, and its analysis is instructive to employers.

In Hebrew v. Texas Department of Criminal Justice, plaintiff Elimelech Shmi Hebrew, who observed the Hebrew Nation Religion, had requested that the Texas Department of Criminal Justice accommodate his religious beliefs by exempting him from the TDCJ’s prohibition on beards and long hair.

For the reasons discussed below, the employer denied the plaintiff’s accommodation request, applying the now-erstwhile “more than a de minimis cost” standard. While the case was on appeal, the Supreme Court clarified the undue hardship standard as previously noted. The 5th Circuit evaluated the appeal applying the Groff standard.

The 5th Circuit thoroughly examined and rejected all three of the arguments TDCJ put forward for why allowing Hebrew to keep his long hair and beard would place a substantial strain on its business:

• First, TDCJ said Hebrew could hide contraband in his hair or beard. The court rejected this argument because, it reasoned, TDCJ already performed hair and beard searches of all officers, and spending a few extra minutes on a contraband search for one officer would not be particularly burdensome, particularly in the context of TDCJ’s relatively large overall operating budget.
• Second, TDCJ took the position that a beard could make it harder for Hebrew to wear a gas mask when necessary for him to use chemical agents in a prison. The court rejected this argument, too, because it was inconsistent with TDCJ’s separate policy allowing beards for employees with medical conditions; there was no evidence that wearing a gas mask would be any harder for Hebrew than for those with beards TDCJ allowed because of medical conditions.
• Third, TDCJ argued that inmates could use Hebrew’s hair to overpower him in an attack. The court found that the existence of a policy allowing women to have long hair, but not men, undermined this argument; if TDCJ could make a purely secular exception to its policy regarding long hair, then it would not be burdensome to make the same exception for Hebrew.

The Court’s analysis makes clear that comparators are relevant to the reasonable accommodation/undue hardship analysis by employers. If an employer allows for secular or medical reasons what an employee requests for religious reasons, think hard before you say “no.”

How an employer has handled the same or similar religious accommodation requests also is germane to the reasonable accommodation/undue hardship analysis. However, employers need to be careful not to have per se rules on what is or not is an undue hardship.

In Groff, the Supreme Court made clear that, in determining what is a reasonable accommodation/undue hardship, an employer must make an individualized assessment in each case. More specifically, the Court stated:

What matters more than a favored synonym for “undue hardship” (which is the actual text) is that courts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.

This aspect of Groff’s analysis underscores that an employer cannot mechanically rely on the same ground(s) it may have had for denying past accommodation requests, and that it must look specifically at present circumstances. This requires a flexible approach that considers how the requested accommodation would actually affect business operations, including how much the accommodation really would cost the employer in the context of its overall financial wherewithal.

The 5th Circuit spelled out what the Groff court suggested relative to cost:

“[Groff’s] reference to the ‘size and operating cost’ of the employer. . . suggests that, all other things being equal, larger businesses and institutions must bear a heavier burden in proving undue hardship.”

However, even smaller employers likely will have a hard time establishing an undue hardship based on cost alone.

Even before Groff, the EEOC has made clear that cost is measured not only by “the size and operating costs of the employer,” but also by “the number of individuals who will in fact need a particular accommodation.”

An accommodation that appears likely to be a one-off, therefore, may not cause enough of a hardship to the employer to meet the Groff standard.

Let’s assume, however, that the accommodation requested in a given case would create an undue hardship. That does not end the inquiry.

Echoing Groff, the 5th Circuit stated that an employer still must consider, on its own initiative, potential alternative accommodations. Perhaps the most common alternative employers fail to consider is transferring the employee to an alternative position.

The EEOC’s guidance on this issue is clear and instructive:

“When an employee’s religious belief or practice conflicts with a particular task, appropriate accommodations may include relieving the employee of the task or transferring the employee to a different position or location that eliminates the conflict with the employee’s religion. Whether or not such accommodations pose an undue hardship will depend on factors such as the nature or importance of the duty at issue, the nature of the employer’s business, the availability of others to perform the function, the availability of other positions, and the applicability of a collective bargaining agreement or seniority system.”

An employer therefore cannot end its process upon concluding that the specific requested accommodation would cause an undue hardship. Instead, it must independently identify other measures that could accommodate the employee and then evaluate whether those measures meet the standard for an undue hardship as articulated by Groff.

Groff has changed the religious-accommodation landscape in a significant way, and employers may need to institute more rigorous processes than they may now have in place for handling such accommodation requests. Getting ahead of these issues requires at least the following:

• A mechanism for employees to request religious accommodations that is spelled out explicitly in the employee handbook or other prominent policy document. All too often reasonable accommodation policies address only physical or mental disabilities.
• Training for managers to report any religious accommodation request to human resources, not to resolve the request on their own or ignore the request altogether.
• An individualized assessment of the circumstances, including any potential alternatives to the requested accommodation. 
• A check for consistency with how they made decisions on substantially similar requests in the past and, if there is any apparent inconsistency, whether the past cases are distinguishable.
• The decision documented in a manner that makes clear what factors the employer considered, and that no impermissible factors played a role. The documentation should be framed carefully to avoid the appearance that the employer considered any impermissible factors, especially religious animosity or bias on the part of co-workers.

Courts applying Groff are likely to scrutinize the decision-making process for missteps to a degree that they did not before. Well-crafted policies and practices, developed with the assistance of counsel, can increase the likelihood of compliance and may enable an employer to avoid significant liability.

Sponsored content

By OperationsInc

In hybrid and remote working environments, employers must adjust their usual HR strategy. They have to consider policies and regulations they didn’t before and ensure their company is in compliance with the laws in the states where their employees work. They must also prevent remote employees from feeling isolated and disconnected from the rest of the company. 

What is the best HR strategy for dealing with employees in multiple states? 

Factors to Consider for a Multi-State Employer  

There are many considerations when you’re managing employees in multiple states with their own requirements and regulations. To create a successful multi-state working environment, take into account these factors:  

1. State Employment Laws  

Each state is unique and may have different laws in place, so you must communicate each employee’s rights in accordance with the state in which they’re working.  

2. Remote Work Policies

You’ll need to consider what guidelines to provide employees working from a home office regarding data privacy and proper information storage, or health and safety concerns relative to an employee’s work environment (i.e., do they work from a couch, coffee table, or a dedicated office?). You must also determine if you will establish core work hours across time zones to help teams collaborate, and what equipment the company will provide to remote employees.  

3. Culture and Employee Engagement

Consider how employee engagement initiatives need to be adjusted to include a remote workforce; how do employees feel connected with the company, manager, and team? How often will employees travel to the headquarters? 

How Do Policies, Regulations, and Laws Differ in Multiple States? 

Depending on the states in which your employees are working, there could be many differences in requirements that can affect your HR strategy. These may include: 

1. Job Posting Requirements

 If you are posting a remote position, your company needs to be aware of pay transparency laws that may apply to applicants from states that require compensation ranges to be included in job advertisements. 

2. Leave Policies

States may have differing requirements for employees to take job-protected leave under various State Family Medical Leave Acts. Additionally, sick leave accruals and other policy details can vary widely by state.  

3. Paid Family Leave or Other State-Specific Payroll Tax Requirements  

Many states are rolling out Paid Family Leave programs or other types of state programs, which require payroll tax contributions by the employee and/or the company.  

4. Expense Reimbursement

Some states require employers to reimburse employees for necessary expenses incurred at the employer’s direction while working remotely.  

Best Practices for Managing Multi-State Employees

Here are some tips to avoid problems when dealing with employees in multiple states: 

Be sure you are properly registering your business in each state that you have employees.  

Overlooking tax implications for state or local tax requirements in payroll processing can result in tax compliance issues for both the company and employees.

Don’t neglect employee engagement.

Remote employees can feel disconnected if not included in company activities or decision-making processes about items that may affect their work. Foster a sense of belonging and engagement through virtual team-building activities and involvement in company initiatives. 

Time zone differences can make coordinating meeting times difficult when employees are spread across regions.

A good solution is to establish core hours for the entire company to ensure employees in different locations are working common hours for at least a portion of the day.   

Be sure you’re not using too many communication platforms.

This can create confusion and hinder streamlined information sharing. Create a centralized communication hub, such as an intranet or team collaboration software, to share important information, updates, and announcements. Also, use targeted messages for specific audiences when necessary. 

Train managers how to manage at a distance and avoid remote work bias.

Now that remote work is more common, we need to rethink how we handle career paths for remote employees and avoid unfair remote work bias. Teach your managers to cultivate, manage and lead team members who are remote and create a career succession path for them. 

A trusted partner can provide you with the help you need to stay in compliance and keep your multi-state staff engaged and connected. OperationsInc offers HR compliance support to assess your organization’s policies for legal compliance to various state requirements and tailor HR strategies and employee engagement initiatives to your unique culture. We also provide multi-state payroll administration or tax compliance support and can help you administer and track employee leaves. Let us help your company avoid compliance issues.  

While the imperative for salary transparency is clear in states that have passed such laws, that openness is mostly optional for employers throughout the rest of the U.S. Still, salary transparency has increased nationally, even in states without mandates on the books, according to the National Women’s Law Center. 

NWLC combed through “extensive” Glassdoor data, which included job listings posted from March 2022 to December 2023. The analysis of employer-provided salary information, filtered by industry, revealed that “pay disclosure increased over time among all selected states — even among those without pay range transparency laws.” 

The aerospace, biotechnology, defense, financial services and pharmaceuticals sectors had the lowest rates of pay transparency. In pharmaceuticals and biotech, 48.6% of job listings disclosed salaries in states with strong transparency laws. Only 15.9% of jobs in states with weak laws disclosed the salary.

Meanwhile, HR and staffing jobs had the highest rate of salary transparency: 81.4% of listings in states with strong laws shared the job’s salary range, with 74.3% of listings in states with weak laws still sharing salary ranges.

In states with zero salary transparency laws, almost 75% of HR job listings still had a pay range posted. 

NWLC researchers said it was “notable” that states without disclosure laws showed an increase in transparency and indicated “that some employers are proactively jumping on the pay transparency bandwagon — even without a legal obligation — because they see it as a benefit for their businesses to attract and retain top talent.” 

As the law center notes, Colorado was first to require salary ranges in job descriptions — with California, New York, Washington, and Washington, D.C., following after it, and Virginia waiting for the Governor to ratify the law the state legislature passed. 

While Connecticut, Maryland, Nevada, and Rhode Island also have salary transparency laws, these states require pay ranges to be disclosed at some point in the interview process — not necessarily in the job listing.

Naturally, NWLC observed an uptick in transparency in listings due to laws being passed.

“Between March 2022 and December 2023, the share of job listings with pay disclosure rose by 67.0% in D.C., 31.9% in Maryland, 25.9% in North Carolina, 25.2% in Georgia, 24.6% in Virginia, 24.1% in Maine, and 19.8% in Michigan,” researchers noted.

”We’re witnessing an exciting cultural shift as pay information emerges from a black box,” NWLC Chief Program Officer Emily Martin said in a statement. “Pay disparities thrive in secrecy.” 

Martin added that providing that openness helps level the playing field, “especially for women and people of color who are more likely to be shortchanged in pay negotiations.”

The Americans with Disabilities Act favors accommodations that keep employees at work in their current roles, but also says employers may be required to reassign workers to vacant positions for which they’re qualified.

That’s generally considered the accommodation of last resort, and case law on the issue remains unsettled. Circuit courts are split on whether the law entitles workers with disabilities to noncompetitive transfers, for example, and the U.S. Supreme Court has yet to weigh in. But that’s not the only question plaguing HR pros when it comes to reassignment.

Those in the industry often ask during conference Q&A sessions whether there’s a limit on how long — and far — they must search for those vacancies.

Unfortunately, there’s no clear-cut answer. Citizens Bank and the U.S. Equal Employment Opportunity Commission recently settled an ADA claim; among other things, the employer agreed to implement a noncompetitive reassignment policy that requires its talent acquisition professionals to look for vacancies for 90 days and within a 50-mile radius from the employee’s worksite.

I wondered whether those numbers could be instructive for other employers aiming to comply with the ADA and stay off EEOC’s radar, but David K. Fram, director of ADA and EEOC services at the National Employment Law Institute, said he doesn’t see it that way.

In terms of time, Fram said three months seems long; he tells employers it’s a snapshot. In other words, consider what jobs are open now, and what will be available soon. “You’re not required to keep looking and looking and looking,” he said.

EEOC’s guidance on the topic is similar: “‘Vacant,’” it says, means “the position is available when the employee asks for reasonable accommodation, or that the employer knows that it will become available within a reasonable amount of time.”

But when it comes to mileage, Fram advises employers to think bigger, saying he certainly would not recommend that an employer limit its search to 50 miles. In fact, he doesn’t recommend a distance limit at all: “I teach employers as a best practice that they should look anywhere they are — starting with the locations closest to home, of course, and then moving out. And if you can’t go far and wide, you’d have to argue undue hardship.”

And if you’re wondering about Fram’s take on the competitive vs. noncompetitive question, he said the safest position — “and certainly the position EEOC would follow” — is to give noncompetitive transfers.

A new state law requires the vast majority of California employers to implement workplace violence prevention plans by July 1, Cozen O’Connor attorneys said in a recent webinar. And while the California Division of Occupational Safety and Health, or Cal/OSHA, is tasked with setting standards for compliance, it’s possible employers won’t see that guidance before the law’s effective date.

Still, the statute sets out some requirements, and there are a number of things employers can do to aim for compliance, the attorneys said, recommending a focus on plain-language and accessibility, among other things. 

1. Consider a stand-alone policy.

Employers in California already must have an injury and illness prevention plan and could potentially connect that and the new violence prevention plan. But it may be worth keeping them separate because the violence prevention plan must be reviewed annually, Elena K. Hillman, of counsel with the firm, said during the Feb. 21 event. Employers may want to house the plan separately from the employee handbook for the same reason.

2. Ensure accessibility.

An employer’s plan must be easily accessible to employees, Hillman said. If someone asks to see it, the document should be readily available online or in a break room, for example. Similarly, an employer may need to have its plan translated into different languages.

3. Strive for specificity.

The plan must be specific to the hazards for each work area, Hillman said; a general plan that says it will identify hazards is not going to cut it. This means “you actually have to do [an] assessment at every work location,” Daniel R. Pascale, CEO of Cosecure Enterprise Risk Solutions, an ancillary business of Cozen O’Connor, said.

4. Get input.

Employers must involve employees in creating and implementing the plan, Hillman said. A business could survey employees, asking them to express any concerns or issues they’ve had with security, workplace violence or similar hazards. Some employers will do it via a safety committee with authorized representatives to address issues, she said; some might do it through a suggestion box. Pascale agreed: “It will be essential for you to include employees who have great familiarity with each work location, and ultimately, the types of threats that they’re facing.”

5. Identify responsible individuals.

The plan must identify the name and job title of the person responsible for implementing the plan, Hillman said. And if that’s a shared responsibility, it should indicate which pieces each individual owns. It’s also crucial that the plan spell out how employees should escalate concerns, she continued.

6. Explain how reports will be investigated.

The plan should indicate how concerns will be investigated and how employees will be informed of the results of any investigation and any corrective actions, according to Hillman.

7. Include an anti-reprisal clause.

Hillman said employer plans must include anti-reprisal clauses and should “really emphasize that employees will not be disciplined or suffer from retaliation for in-good-faith reporting workplace violence, hazards and issues.”

Beyond the plan

California’s law sets out other specifics for the required plans, but also mandates training and record retention. 

And as for enforcement, it remains to be seen just how and when Cal/OSHA will be reviewing employers’ plans and related activities. The agency may not have the manpower to consistently audit employer compliance, John R. Carrigan Jr., member of the firm, said during the webinar. It’s possible that compliance instead may be reviewed when an incident occurs or amid a negligence claim, and that noncompliance could be used to allege negligence, he said; “so I think it’s important that we all do what we can to comply with the statute.”

Congress passed the Pregnant Workers Fairness Act in 2022 to codify protections for expectant employees not guaranteed under previous disability discrimination laws, namely the Americans with Disabilities Act and the Pregnancy Discrimination Act.

In doing so, lawmakers brought federal pregnancy protections closer to what had already existed in many states, but the legislation also creates new compliance considerations for employers, speakers at a Disability Management Employer Coalition virtual event said.

“I’ve been singing its praises for a while now,” Marjory Robertson, assistant VP and senior counsel at insurer Sun Life, said of the PWFA, “but I think people are now starting to understand that it is potentially really going to disrupt things.”

How the PWFA intersects with the ADA

Robertson and Marti Cardi, senior compliance consultant at Matrix Absence Management, analyzed the PWFA’s provisions in two areas: accommodations and leave. On the former, the PWFA helps to close some of the gaps that existed for pregnant workers between the ADA and PDA.

Pregnancy is not a disability under the ADA, but the law does require employers to make reasonable accommodations for employees who have a physical or mental impairment that substantially limits a major life activity — including such conditions that are caused by pregnancy or childbirth.

Similarly, the PDA does not explicitly require employers to grant accommodations for pregnant workers. It does, however, require employers to treat pregnant employees the same as other employees insofar as their ability or inability to work. If employers provide modified tasks, alternative assignments, leave or other benefits to other, similar employees, they must also extend these provisions to pregnant employees.

The PWFA changed this equation by establishing a right to reasonable accommodation for eligible employees — those at employers with 15 or more employees — who have “known limitations” affecting their ability to perform essential job functions due to pregnancy, childbirth or related medical conditions. Such limitations need not be disabling, Robertson said, and the employee is entitled to an accommodation so long as it is temporary and does not cause undue hardship.

An employer’s PWFA compliance strategy may differ from its ADA-related policies. For example, the law explicitly prohibits employers from requiring an employee to take paid or unpaid leave if another reasonable accommodation can be provided.

“A number of employers under the ADA take the approach of, ‘We can’t give you what you want but you can have an unpaid leave.’ This law says you cannot do that,” Robertson said.

Even before the PWFA, regulators including the U.S. Equal Employment Opportunity Commission would be “all over employers” that forced pregnant employees out on leave without trying to allow them to work because of their pregnancy, Cardi said; “This just brings that lesson home, and employers should really take heed.”

The EEOC has provided an updated workplace anti-discrimination poster that includes information about the law.

EEOC regulations due before end of the year

The commission also released its draft PWFA regulations last month, and the final version of the document is due within a year of the law’s enactment, Robertson said.

EEOC proposed a broad interpretation of which “related conditions” are covered under the PWFA, Cardi said, which can include preexisting conditions that are aggravated by pregnancy or childbirth; “You have to think broadly when you assess whether one of your pregnant or recently [pregnant] employees is covered.”

For example, the nonexhaustive list of proposed related conditions includes termination of pregnancy — such as abortion — as well as infertility, mental illness and use of birth control, among others.

The commission also provided a list of four “simple modifications” that would not impose undue hardship in “virtually all cases” when requested by an employee due to pregnancy:

• Allowing an employee to carry water and drink, as needed, in the employee’s work area.
• Allowing an employee additional restroom breaks.
• Allowing an employee whose work requires standing to sit and whose work requires sitting to stand.
• Allowing an employee breaks, as needed, to eat and drink.

These accommodations will usually be reasonable accommodations and will almost never be an undue hardship, “so that’s an uphill battle to fight” for employers, Cardi said. Requests for these accommodations should almost never require medical documentation from the employee’s provider, she added.

The agency’s unexpected turn

Robertson highlighted the EEOC’s definition of “in the near future,” which specifically refers to the PWFA’s requirement that qualified employees — those who meet the criteria for PWFA coverage — be able to perform essential job functions with or without a reasonable accommodation.

If an employee cannot perform one or more essential functions, the individual may still be qualified under the PWFA if the inability to do so is temporary, the employee could perform the essential function(s) in the near future, and the inability to do so can be reasonably accommodated.

Upon reading the law, Robertson said that her initial belief was that “in the near future” would at least include the term of a pregnancy as well as the time needed to recover from childbirth. But the EEOC “took a turn” with its draft regulations, she said, by defining “in the near future” to mean a period of up to 40 weeks per accommodation needed.

According to Robertson, the 40-week period could essentially reset not only over the course of an employee’s pregnancy, but also after childbirth for accommodations granted to assist employees who have conditions such as postpartum depression.

But this would not necessarily constitute “a set allotment” of 40 weeks, Robertson said: “If you can show undue hardship, you don't have to allow it for this amount of time, though [EEOC does] say that you need to allow it for whatever amount of time until the undue hardship kicks in.” Robertson added that she would be surprised if this area of the regulations isn’t revised for the final version.

The regulations also note that leave offered as an accommodation under the PWFA is job-protected, and employers must continue offering health insurance benefits during such leave, Robertson said.

PUMP Act not the only word on lactation accommodations

Contained within the same piece of legislation that enacted the PWFA was the Providing Urgent Maternal Protections for Nursing Mothers Act, also known as the PUMP Act. The law requires employers to provide break time for workers to express breast milk as well as a space within the workplace to do so, with some exceptions.

The Fair Labor Standards Act has long required employers to provide nonexempt employees time off for lactation breaks in the workplace, but the PUMP Act expands this coverage to exempt employees as well, Cardi said.

Aside from the law’s exemptions for workers of small businesses and those in certain industries and job types, employers also should take note of state and local laws that cover lactation in the workplace, Robertson said. Moreover, the EEOC’s draft PWFA regulations note that lactation, including breastfeeding and pumping, is also included under the law’s definition of related medical conditions.

“It is becoming a more and more complicated area,” Robertson said of lactation protections in the workplace.

Companies hoping to boost collaboration, innovation and productivity by implementing return-to-office policies are facing complaints of discrimination by employees who request accommodation for mental health disabilities, The Wall Street Journal reported. 

Although confidentiality rules make getting a clear picture difficult, the U.S. Equal Employment Opportunity Commission has seen a 16% rise between 2021 and 2022 in charges against employers for discriminating against employees with anxiety, depression and post-traumatic stress syndrome, the Journal said.

And at the state level, data show mental health disorders have risen to be one of the top disability complaints filed with civil rights agencies. “Mental illness is at an all-time high, and Covid was a huge contributor,” Hannah Olson of disability-accommodation software company Disclo told the Journal. “The other piece is return-to-office.”

The Americans with Disabilities Act requires employers to engage with employees to determine a reasonable disability accommodation if they ask for one to help them do their job.

Compromise can be made difficult when it comes to mental health disabilities because of limits that confidentiality imposes on what the parties can talk about. And when it involves employees asking to remain remote, employers must contend with the impact allowing that has on employees who return to the office. 

“Allowing some employees to work remotely can stoke complaints about unequal treatment among the workforce,” the Journal said. 

“There’s a fine line between ‘I want it because it makes me happy,’ and ‘I want it because if I don’t get it I’ll be depressed or anxious,’” Patty Pryor, a Jackson Lewis attorney who represents employers, said in the report. 

After years of approving most accommodation requests, employers are pushing back; in the first half of this year, they approved just under 92% of requests — still high, but down from more than 96% in 2021, according to data tracked by Sedgwick, a disability claims manager.  

Companies that don’t appear to make an effort to accommodate a request can face an EEOC action. In September, the agency filed a complaint against a Georgia company after it fired a marketing manager who requested to work remotely three days a week to accommodate anxiety.

This situation — where an employee requests remote work as a mental health accommodation — is on the rise, Sarah DeCosse, an EEOC disability attorney, told the Journal. “There have been a lot of inquiries about this basic scenario,” she said. 

In some cases, employees will file with a state agency, where local laws can offer robust worker protections.  

Brittinay Lenhart, a project manager for a military contractor, filed a complaint with the Nevada Equal Rights Commission earlier this year when a new manager required her to come to the office for meetings after she had been allowed to work remotely to accommodate her anxiety and PTSD. 

“I had to go back on Valium to handle all this,” Lenhart told the Journal. “For my mental health I thought, I just need to quit.”

The company said it tried to find an accommodation for her. 

The case points to the challenges employers can face when they get these remote work requests. The work-from-home mandate that was imposed during Covid leaves them little room to require employees to come back to the office, Becca Lory Hector, a disability advocate and consultant, said in the report. 

“You can’t put [remote work] back in the bottle,” she said. 

 

Artificial intelligence allows employers to automate a wide range of human resources tasks, including scanning resumes into usable data, conducting screening interviews and even suggesting hiring decisions. The promise of HR AI tools is compelling: better, faster staffing decisions made at much lower cost.

For now, however, that promise comes into conflict with a number of laws and regulations.

How does HR use AI today?

Cosmetics giant L’Oréal has used an AI-powered chatbot to interact with potential candidates during the initial stages of the interview process, answer questions and screen candidates for availability and visa requirements. Hilton Hotels and Resorts was able to reduce its average time to hire from 43 days to five days with an AI-empowered tool featuring on-demand digital interviews that allows the hotel chain to interview multiple candidates at once without a recruiter.

Other HR teams have uncovered AI flaws. Amazon’s experimental hiring tool used AI to score job candidates and make hiring decisions. The company soon noticed that the system was not rating candidates for tech roles in a gender-neutral way. Ultimately, Amazon decided to only use the tool for recommendations rather than making decisions.

One company explains that its recruiting tool, which is reportedly used by 10,000 teams across the globe, automatically “enriches” the candidate profile by scanning 20-plus social media platforms for data. While searching social media has long been a part of recruiting, an AI tool comprehensively harvesting personal data and using it to make hiring recommendations invites new complications. What if the tool chose to disfavor a candidate who wrote something critical about a previous employer on social media, for example?

How does existing law account for AI?

There are no federal regulations in the U.S. that expressly govern the use of AI in the workplace (yet), but the U.S. Equal Employment Opportunity Commission has published guidance to remind employers that existing anti-discriminatory laws cover AI, including Title VII and the Americans with Disabilities Act.

Most importantly, the EEOC has explained that just because a decision is made by AI, companies are not shielded from liability for discriminatory actions. Rather, the same rules that apply to hiring, promotion, and firing decisions made by humans apply to those made with the assistance of AI.

Companies also are not off the hook if they use tools created by third parties. The EEOC opined that companies remain responsible for decisions made using a vendor’s tools. The onus is on the company to ensure compliance with nondiscriminatory use of AI tools.

Many states and municipalities, however, are stepping in to regulate the use of AI tools in the workplace. For example, New York City enforces Local Law 144, which regulates the use of AI in “employment decisions.” The law requires employers to take steps prior to using AI employment tools, such as conducting a bias audit and notifying candidates of the use of the tool. States like Illinois and Maryland have enacted legislation regarding the use of AI to assess video interviews and facial recognition. Several other AI-related bills are on the horizon.

Employers with workers outside of the U.S. may be subject to other requirements. The European Parliament has passed a draft law called the Artificial Intelligence Act that contains broad regulations aimed at the use of AI across industries and social activities using a risk-based approach. Importantly, the use of AI systems in recruiting and performance evaluation would be considered “high risk” under the AI Act’s sliding scale, subjecting employers to heavy compliance requirements.

The threat of legal action relating to AI will only increase from here. On Aug. 9, the EEOC settled its first lawsuit alleging AI-based age discrimination against an online English-language tutoring company, iTutorGroup. The company’s software was alleged to have automatically rejected female applicants older than 55 and male applicants older than 60. Specifically, one plaintiff submitted an application using her real birthday and was immediately rejected, but she was offered an interview with the same application and a more recent birth date.

Not only did the settlement result in a hefty monetary payout, but the company agreed to adopt EEOC-approved anti-discrimination policies and conduct training. The company also was required to reconsider all applicants who were purportedly rejected because of their age. While this settlement is the first of its kind, the EEOC’s draft enforcement plan signals that the agency will focus on the use of AI from the recruitment stage through performance management.

Similar litigation has been filed against Workday, the prominent human resources and financial management platform. A plaintiff seeking to represent a class of similar individuals alleged he applied for at least 80-100 positions with companies that use Workday but was denied employment each time. The plaintiff claimed he was not hired due to “systemic discrimination” because Workday’s AI allegedly has a disparate impact on applicants based on race, age and disability.

4 steps to avoid an AI headache

If AI is not thoughtfully implemented, it can create new challenges in the form of biased decision-making and possible litigation. However, by taking the following practical steps, you can reduce those risks.

1. Take the time to understand not only what a tool does but how it achieves its output. A resume scanner may present you with the “most qualified” candidates for a position, but how did it achieve those results? What data does it collect from each resume? Which fields are prioritized? Where did it get its definition of “most qualified”? Is there any human component to the ultimate output?
2. Do not rely on claims that a tool is “bias free.” Many vendors advertise that their AI solutions will deliver results unclouded by discrimination. This sounds great but is worth very little if you are ever faced with a discrimination lawsuit. If a tool delivers biased results, your organization can be held responsible even if you believed that the results were legitimate.
3. Monitor and validate the results generated by the tool. Someone should be responsible for regularly reviewing the tool’s output to assess whether it has delivered skewed results. If a tool recommends male candidates for interview at a much higher rate than female candidates, you want to flag that issue early, understand the reason for those results, and make adjustments. When validating whether results are biased, the EEOC’s Uniform Guidelines on Employee Selection Procedures remain the gold standard.
4. Make sure a human is involved in every decision. If a human is part of the decision-making process, you will always have a witness who can explain the reasoning. Relying completely on a tool that later turns out to be biased leaves little room for defense.

These four steps are a strong starting point for HR teams to help their companies identify useful AI tools, ensure that they deliver legitimate results and defend against any legal challenges that could come their way.