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How Does the FMLA Apply to a Remote Workforce?

The Family and Medical Leave Act (FMLA) was enacted in 1993, a year when the idea of working a corporate job from a living room was rare. When the law was passed, the FMLA didn’t contemplate a remote workforce. Now, and especially post-pandemic, many companies are embracing a fully remote workforce (e.g., sales representatives, healthcare medical device technicians and software engineers). While employees’ needs for a leave of absence have always been around, remote employment and its effects on the applicability of the FMLA requirements has not. For well over two years, many employees have been working from home. Some report to a manager at the headquarters or worksite. Plenty of remote employees, however, report to an individual who also works remotely. The new remote landscape is making what used to be an easy application of FMLA eligibility into a difficult analysis. This article examines the FMLA regulatory framework for remote employees, a recent Texas federal court decision on the issue and the practical options that employers have moving forward.

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State Law Privacy Video Series | Employee Exemptions

California, Virginia and Colorado have new privacy laws coming into effect in 2023. But now is the time to start preparing your business or organization for compliance. Throughout the State Law Privacy video series, we examine the different aspects of these laws and provide you the knowledge and tools you need for proper compliance.

In the next video of the series, Associate Fran Forte explores one of the notable exemptions under California’s law as it relates to employee data and how employee data is handled under Virginia and Colorado’s privacy laws.

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Monkeypox in the Workplace: Key Considerations for Employers

As of July 26, 2022, there are 3,591 confirmed cases of monkeypox in the United States, according to US Centers for Disease Control and Prevention (CDC) data, and the World Health Organization (WHO) Director-General has declared the multi-country monkeypox outbreak a Public Health Emergency of International Concern (PHEIC). With much about the potential impact and scope of monkeypox still unknown, employers should consider taking proactive steps now, as may be appropriate for their workforce, to enhance and reinforce the safety protocols already in place from the COVID-19 pandemic.

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EEOC Potentially Limits Employer’s Right to Mandate COVID-19 Testing

On July 12, 2022, the US Equal Employment Opportunity Commission (EEOC) revised its guidance on compliance with disability discrimination law during the COVID-19 pandemic. While previous guidance, initially published on December 14, 2021, provided that COVID-19 viral testing was permissible for on-site employees and did not run afoul of the Americans with Disability Act (ADA) due to health and safety priorities of the pandemic, the recent EEOC updates now only permit screening and viral testing measures when such measures are job-related and consistent with business necessity, holding COVID-19 testing to the same standard as other workplace medical tests. The July 12 update “makes clear that going forward employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify viral screening of employees to prevent workplace transmission of COVID-19,” the EEOC said.

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Seattle Payroll Expense Tax Upheld by State Appellate Court

Last month, the Washington Court of Appeals affirmed a lower court’s decision to dismiss a challenge to the recently enacted payroll expense tax in Seattle, WA. Seattle Metro. Chamber of Commerce v. City of Seattle, No. 82830-4-I, 2022 WL 2206828 (Wash. Ct. App. June 21, 2022).

The tax, which went into effect on January 1, 2021, applies to entities “engaging in business within Seattle” and is measured using the business’s “payroll expense” (defined as “compensation paid in Seattle to employees,” including wages, commissions, salaries, stock, grants, gifts, bonuses and stipends). The tax only applies to businesses with a payroll expense of more than $7 million in the prior calendar year, and compensation is considered “paid in Seattle” if the employee works more than 50% of the time in the city.

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Supreme Court: An Employee’s Individual PAGA Claim Must Be Adjudicated in Arbitration

On June 15, 2022, the Supreme Court of the United States finally issued its long-awaited decision in Viking River Cruises, Inc. v. Moriana. The Court partially overturned Iskanian v. CLS Transportation Los Angeles, LLC (Iskanian), determining that the Federal Arbitration Act (FAA) preempts the aspect of Iskanian’s holding that precludes the division of Private Attorneys General Act of 2004 (PAGA) actions into individual and non-individual claims through an agreement to arbitrate. Meaning, if an employee subject to a valid arbitration agreement brings a PAGA claim, then the employee’s individual PAGA claim must be adjudicated in arbitration. (The individual aspect of the PAGA claim refers to violations of the Labor Code actually suffered by the plaintiff, whereas the non-individual “representative” aspect of the PAGA claim refers to the violations the plaintiff has alleged on behalf of other employees.)

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California Supreme Court Clarifies Whether Missed-Break Premiums Are ‘Wages’ That Trigger Derivative Penalties

On May 23, 2022, the California Supreme Court issued its decision in Naranjo v. Spectrum Sec. Servs. Inc. (Naranjo), holding that meal and rest break premiums (also known as extra pay or premium pay) constitute “wages” that: (1) must be accurately reported on employee wage statements pursuant to Labor Code section 226 and (2) must be timely paid to employees to avoid waiting time penalties pursuant to Labor Code section 203. The Court explained that “although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period.” Thus, employees may be entitled to wage statement penalties and waiting time penalties where the employee worked through their break.

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New Jersey High Court Upholds Jersey City Payroll Tax

The New Jersey Supreme Court upheld two decisions by lower state courts in May to dismiss litigation challenging Jersey City’s ordinance that taxes city employers’ payroll but exempts residents. The supreme court also agreed with the state appellate division’s decision to remand for discovery one provision of the ordinance regarding the tax treatment of supervisors. Justice Barry T. Albin dissented in part.

In a recent Tax Notes article, McDermott Partner Kathleen Quinn agreed with Albin’s dissent.

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German Tax Aspects of Cross-Border Remote Working

As a result of the COVID-19 pandemic, remote working became a necessity. Despite the easing lockdowns, the trend is likely to stay, particularly with “workstations” being actively promoted by the travel industry; however, there are considerable tax consequences for international employers. In this International News article, McDermott’s Gero Burwitz and Isabella Denninger discuss the complexity of this new working order and how international businesses can navigate it.

Access the article (pg. 11).




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