When employers use background checks acquired through a third party company in the business of compiling background information (referred to as a “consumer reporting agency”), employers are subject to the federal Fair Credit Reporting Act (“FCRA”). Some states, including New Jersey, have their own fair credit reporting act that may impose additional responsibilities upon employers. Employment background checks, which are referred to as “consumer reports”, may include information about an individual’s credit worthiness, character, reputation, criminal background, driving record, and civil lawsuits among other information. The FCRA imposes obligations on employers at three different stages: (1) before requesting the consumer report, (2) before taking an adverse employment action against an applicant or employee based on information contained in the consumer report, and (3) after taking the adverse employment action against the applicant/employee.
As we previously posted
on this blog, federal and state governments, labor and employment agencies, and plaintiff’s attorneys have increased their focus on employers who misclassify employees as “independent contractors” in an effort to save costs on minimum wage and overtime requirements. On July 15, 2015, the federal Department of Labor (“DOL”) issued formal guidance addressing misclassification of employees as independent contractors under the Fair Labor Standards Act (“FLSA”). The DOL’s guidance stresses the FLSA’s already expansive definition of “employee,” and makes clear that the DOL will consider most workers to be employees under the statute.
The U.S. Equal Employment Opportunity Commission (EEOC) recently ruled that a claim of discrimination on the basis of sexual orientation states a claim of discrimination on the basis of sex within the meaning of Title VII of the Civil Rights Act of 1964.
In a series of private letter rulings issued during the last several years, the Internal Revenue Service ("IRS") approved programs allowing defined benefit plan sponsors to offer retirees in pay status the ability to convert existing annuity forms of payment into lump sums. These limited lump sum offers were viewed as a mechanism to de-risk the plan by transferring longevity risk and investment risk to the retirees. The basis for the private letter rulings was that the addition of the right to convert an annuity benefit into a lump sum payment was treated as an increase in benefits, which allowed the participant to change the annuity payment period pursuant to Treasury regulations issued under Section 401(a)(9) of the Internal Revenue Code.
In a recently issued opinion, the United States Court of Appeals for the Second Circuit (encompassing New York, Connecticut, and Vermont) held that two posthumously entered domestic relations orders were valid qualified domestic relations orders (“QDROs”) under ERISA that properly assigned plan funds to the ex-wife of a deceased participant, despite the claims of the participant’s surviving spouse to survivor benefits under the plans. A valid QDRO is one of the few exceptions to the ERISA prohibition on the assignment or alienation of plan benefits.
The federal Fair Labor Standards Act (“FLSA”) and its state law counterparts’ minimum wage and overtime requirements
do not apply to employers with respect to “independent contractors” or “1099 workers
;” that is, those workers who provide services to an employer under a contract but are not “employed” by the employer. This can incentivize employers to misclassify employees as independent contractors because of the up-front cost savings.
As we previously posted here
, the New Jersey Assembly introduced a bill last year that would require employers to provide paid sick leave to their employees. Under the proposed bill, employers with less than ten employees would be required to permit employees to accrue one hour of paid sick leave for every 30 hours worked and up to 40 hours in total each year. Employers with ten or more employees would also be required to permit employees to accrue one hour of paid sick leave for every 30 hours worked and up to 72 hours in total each year. Employers would be prohibited from taking any retaliatory actions against an employee who uses sick leave or complains about an employer engaging in misconduct with respect to the leave entitlement. The Assembly took no action on the bill after it advanced out of the Assembly Budget Committee last December, but the New Jersey Senate has now advanced a similar version of the bill.
We previously wrote about a New Jersey Appellate Division decision
upholding a criminal indictment against Ivonne Saavedra for stealing documents from her employer to support her discrimination and whistleblower lawsuit.
On June 23, 2015, the Supreme Court of New Jersey affirmed the Appellate Division decision, thereby preserving the criminal charges against Saavedra.
On May 18, 2015, the United States Supreme Court unanimously held in Tibble v. Edison International that in addition to the fiduciary duty to exercise prudence when initially selecting a plan’s investment options, a fiduciary also has a separate continuing duty to prudently monitor investments and remove imprudent ones.