Colorado Compliance Connection - October 2023

Federal Compliance Update

NLRB Announces New Joint-employer Standard

On Oct. 26, 2023, the National Labor Relations Board (NLRB) announced a final rule that establishes new criteria to determine joint-employer status. Joint employment situations can happen when two or more employers share personnel hiring, supervision and management practices. When a joint employment status exists, joint employers are equally responsible for compliance with applicable laws and regulations.

The final rule is scheduled for publication in the Federal Register on Oct. 27, 2023, with an effective date set for 60 days after publication. If the rule is published as expected, the final rule should become effective on Dec. 26, 2023. Employers should note that the NLRB will apply the new standard only to cases that are filed with the agency after the final rule effective date.

Joint Employment

Whether joint employment is by design or unintentional, joint employers are equally:

• Liable for unfair labor practices committed by other joint employers;
• Required to bargain with the union that represents jointly employed workers; and
• Subject to union picketing or other economic pressure if there is a labor dispute.

To determine whether a joint-employer relationship exists, employers must evaluate the degree of control they exert over “essential terms and conditions of employment.” Essential terms and conditions of employment include wages, benefits, hours of work and employee hirings, discharges, discipline, supervision and direction.

History: 2020 Joint-employer Standard

The NRLB adopted the current joint-employer standard on April 27, 2020. This standard applies to labor issues related to the National Labor Relations Act.

The current standard considers the “substantial direct and immediate control” employers have over essential terms and conditions of employment for individuals who are employed by another organization. Specifically, the 2020 joint-employer standard indicates that a business is a joint employer of another employer’s employees only if the degree of joint control is of sufficient magnitude to lead to the conclusion that the joint employer meaningfully affects matters relating to the employment relationship.

In addition, under the 2020 rule, other evidence may suggest (but not prove) the existence of joint-employer status, particularly when the evidence points to indirect control or the right to exert control through contract or agreement (especially when control is never exercised).

Overview of the 2023 Rule

The new rule rescinds the 2020 joint-employer standard and:

• Clarifies the definition of “essential terms and conditions of employment;”
• Identifies the types of control that are necessary to establish joint-employer status and the types that are irrelevant to the joint-employer inquiry; and
• Describes the bargaining obligations of joint employers.

Employers should pay particular attention to the fact that the 2023 rule was drafted to be more inclusive than the 2020 rule. This means it will become easier for employers to be classified as joint employers. The 2023 rule created this more inclusive standard for determining joint-employer status by removing the requirement that joint employers must “possess and exercise … substantial direct and immediate control” over essential terms and conditions of employment.

In addition, the new standard more faithfully grounds the joint-employer rule in established common-law agency principles. Specifically, the rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, regardless of whether such control is exercised.

Finally, the NLRB has also stated that “the new rule also provides extensive guidance to parties regarding their rights and responsibilities in situations where joint-employer status has been established.”

Terms and Conditions of Employment

The final rule limits terms and conditions of employment to:

• Wages, benefits, and other compensation;
• Hours of work and scheduling;
• The assignment of duties to be performed;
• The supervision of the performance of duties;
• Work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline;
• The tenure of employment, including hiring and discharge; and
• Working conditions related to the safety and health of employees.

Impact on Employers

Employers, particularly contractors and subcontractors, should become familiar with the new rule and determine whether a more inclusive joint-employer standard would reclassify them as joint employers in their operations by the rule’s effective date. Employers affected by the new standard should also take precautionary steps to ensure other joint employers comply with regulations regarding labor and employment laws for joint employees.

EEOC Strategic Enforcement Plan and What It Means for Employers

New pregnancy-related protections, the increasing use of technology in employment decisions and questions about salary history are among the topics the U.S. Equal Employment Opportunity Commission (EEOC) will focus on over the next five years, the agency recently revealed in its Strategic Enforcement Plan (SEP) for Fiscal Years 2024 to 2028 (2024 SEP).

Issued on Sept. 21, 2023, the 2024 SEP updates and refines the EEOC’s existing subject matter priorities from prior SEPs issued in 2013 and 2017. The new version reflects recent developments relating to the federal equal employment opportunity (EEO) laws that the EEOC enforces.

This provides a summarized version of the 2024 SEP and offers practical tips on how the SEP may help employers avoid claims under federal EEO laws.

Action Steps for Employers

Employers with 15 or more employees should become familiar with the 2024 SEP, review their employment policies and practices, and adjust necessary to ensure compliance with federal fair employment laws and regulations.

In particular, employers should pay close attention to their policies and practices relating to pregnancy, sexual orientation, gender identity, COVID-19, technology-based hiring and recruiting methods, preemployment inquiries about salary or criminal history, and other topics identified in the 2024 SEP.

The following are just a couple of the areas EEOC will focus on throughout 2024 – 2028:

Eliminating Barriers in Recruitment and Hiring

• The use of technology, such as artificial intelligence and machine learning, in the hiring process, where those systems intentionally exclude or adversely impact protected groups;
• Job advertisements that exclude or discourage certain protected groups from applying;
• The channeling, steering or segregation of individuals into specific jobs or job duties based on protected traits;
• Policies and practices that limit access to job training or advancement opportunities based on protected traits or that limit employees exclusively to temporary work based on a protected trait when they qualify for available permanent positions;
• Reliance on restrictive application processes or systems, including online systems that are difficult for individuals with disabilities or other protected groups to access; and
• The use of screening tools or requirements that disproportionately impact workers based on a protected trait, including those facilitated by artificial intelligence or other automated systems, preemployment tests and background checks.
• Protecting Vulnerable and Underserved Workers

The EEOC will focus on policies and practices that impact particularly vulnerable workers and persons from underserved communities. Because these individuals may be unaware of their rights under EEO laws, they may be reluctant or unable to exercise those rights, or they may have historically been underserved by federal protections. Several other factors can also make these workers particularly vulnerable to discriminatory practices or policies.

Under the SEP, the following individuals fit into this category:

• Immigrant and migrant workers and workers on temporary visas;
• Individuals with developmental, intellectual or mental health-related disabilities;
• Individuals with arrest or conviction records;
• LGBTQI+ individuals;
• Temporary workers;
• Older workers;
• Individuals employed in low-wage jobs, including teenage workers employed in such jobs;
• Survivors of gender-based violence;
• Native Americans/Alaska Natives; and
• Individuals with limited literacy or English proficiency.
• Addressing Emerging and Developing Issues
• The EEOC will continue to prioritize issues that may be emerging or developing. These currently include the following:
• Qualification standards and policies or practices that discriminate against individuals with disabilities;
• Protections for workers affected by pregnancy, childbirth or related medical conditions;
• Discrimination influenced by or arising as backlash in response to local, national or global events, such as discriminatory bias arising from recurring historical prejudices;
• Discrimination associated with the long-term effects of the COVID-19 pandemic, including long COVID; and
• Technology-related employment discrimination.
• Advancing Equal Pay for All Workers

While equal pay has been a long-term priority issue for the EEOC, the agency will continue to focus on combatting pay discrimination in all its forms—on the basis of sex under the Equal Pay Act and Title

VII; on other protected bases covered by federal EEO laws, including race, national origin, disability and age; and at the intersection of protected traits.

The EEOC will also focus on employer practices that may impede equal pay or contribute to pay disparities and may lead to violations of EEO laws. These practices may include:

• Pay secrecy policies;
• Discouragement or prohibition of workers asking about pay or sharing their pay with co-workers; and
• Reliance on past salary history or applicants’ salary expectations to set pay.

State Compliance Update

Employee Voting Laws

As Election Day approaches, employers need to know how they can prepare to support their employees and meet compliance. Although federal law doesn’t require employers to provide employees with time off to vote, many states have voting leave laws that allow employees to take time off in certain circumstances.

In the state of Colorado, employers must provide employees with up to two hours of paid leave to vote in any primary or general election. An employer is not required to grant voting leave to any employee who has three or more hours off from work while the polls are open. Employees must apply for leave prior to election day. The employer may specify the hours during which the employee may be absent. However, if the employee requests that the time away from work be at the beginning or end of the work shift, the employer must grant this request. Colo. Rev. Stat. § 1-7-102

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Compliance Calendar

November

Nothing for this Month

December

12/5 – 2022 EEO-1 Component 1 Filing Deadline

12/29 – Gag Clause Prohibition Compliance Attestation (Group Health Plans, insurers, and insurance brokers) – more information, click here.

January

Nothing for this Month