Compliance Monitor - Examining New and Upcoming Labor Laws in Q1
In this article, we cover new examples of regulatory developments influencing workforce strategies for companies around the world. With stories drawn from third-party sources and commentary based on AGS expertise and experience, we look at issues ranging from worker classification, data privacy and worker protections to visa updates, leave entitlements and workplace discrimination laws.
This update provides a small taste of the vast, changing regulatory environment we monitor every day. If you have questions on anything you read, send us an email.Quick Links
US: Federal Enforcement Agencies Join Forces to Stop Misclassification
On January 6, 2022, the US Department of Labor’s (DOL) Wage and Hour Division and the National Labor Relations Board (NLRB) announced the signing of a Memorandum of Understanding (MOU) that strengthens the agencies’ partnership in enforcing the laws they administer and reaffirms their commitment to ensuring the rights and protection of workers. The partnership will help ensure that employers pay workers their rightful wages and that workers can take collective action to improve their working conditions without fear of retaliation.
The MOU outlines how they will work together to share information and complete enforcement activities to guarantee workers receive the appropriate protections. The partnership will establish processes for referrals, joint investigations and cross-departmental training. Through the partnership, they will target employers with unlawful pay practices, deliberate independent contractor misclassification and prevent retaliation against whistleblowers.
Each agency has agreed to advise employees when they have reason to believe that unlawful conduct that falls within the jurisdiction of the other agency may have occurred. For example, if in the course of an investigation, the DOL uncovers conduct that it believes may violate the National Labor Relations Act, the DOL will advise employees that an opportunity may exist to file a charge with the NLRB.
Another goal of the collaboration is to increase education about current labor laws, legal protections and legal responsibilities for both employers and workers through community outreach, distribution of compliance materials, presentations and training events.
Employers may face increased enforcement actions by the respective agencies due to the nature of the partnership. Companies engaging non-employee workers, whether independent contractors or those working under joint employment, can review contracts for potential misclassification and stay up to date on any amendments to existing labor laws with the help of a compliance expert.
US: Illinois Ruling Redefines Privacy Law Boundaries
On February 3, the Illinois Supreme Court unanimously ruled in McDonald v. Symphony Bronzeville Park that employers can be subject to liability under both the Illinois Workers’ Compensation Act and the Biometric Information Privacy Act (BIPA).
The case began when nursing home employees objected to their employer’s practice of requiring employees to scan their fingerprints as a means of authenticating employees and tracking their time. The employees sued the company for allegedly violating their rights under BIPA by collecting, storing and using their biometric information without first providing the necessary releases and notices.
The nursing home argued that the claim should be subject to the Workers’ Compensation Act and not BIPA because the violation of privacy happened at work. Under the Workers’ Compensation Act, affected employees that have a qualifying injury give up their rights to sue for that same workplace injury in exchange for compensation.
The Court had to determine whether these violations of data privacy rights under BIPA are injuries compensable under the Workers’ Compensation Act. The Court concluded that BIPA violations are personal and societal and do not fall under the physiological and psychological injuries covered by the Workers’ Compensation Act. Therefore, employees are entitled to seek compensation under both laws.
Employers should be aware of rulings surrounding the increasingly common use of biometric data, as violations of the BIPA can have a great financial impact on businesses. Companies can seek support from internal and external legal counsel to monitor any additional proposed amendments to BIPA and what potential changes to the law could mean for employer liability.
Canada: Ontario Passes Worker Protection Legislation
On December 2, Ontario passed the Working for Workers Act, 2021 (Act). Among other things, the Act amends the Employment Standards Act and creates provisions that require registration and licensing for temporary help agencies, which includes staffing companies and recruiters, restricts the ability for employers to impose noncompete agreements for most employees and mandates employers create a “Disconnecting from Work” policy.
Under the Act, temporary help agencies and recruiters will need to obtain a license in order to operate, and companies will be prohibited from knowingly doing business with an unlicensed agency or recruiter. This provision will help the government monitor agencies and recruiters for compliance with employment rights.
In addition to the upcoming licensing requirement, the Act prohibits employers from entering into employment contracts or other agreements with employees that include non-compete clauses and prevents employees from accepting positions at competing companies after their employment ends. The ban on noncompete clauses is already in effect as it was retroactive to October 25, 2021.
The employer-mandated Disconnecting from Work policy requires employers with 25 or more employees to establish a policy that outlines expectations and rights of employees to disconnect from workplace communications outside of working hours. While the law doesn’t specify what must be included in the Disconnecting from Work policy, companies have until June 2, 2022, to implement a policy. Further information on what needs to be contained in the policy will be provided at a later date.
This new law impacts most companies that have any workers in Ontario regardless of what type of workers they engage. Given the lack of clarity on policy specifics and compliance dates, companies should continue to monitor deadlines and developments under the Act to ensure they remain compliant. A resource with knowledge of the legal landscape can help companies determine what actions they need to take and when, whether that means reviewing contracts or ensuring licenses are in place.
UK: Supreme Court Ruling Impacts Paid Leave Entitlements
All workers are entitled to paid leave following a recent UK Supreme Court decision. In the Smith v. Pimlico Plumbers case, the court ruled that employers are responsible for providing leave and informing their workers, including gig workers and umbrella workers, that paid leave is available.
Under this decision, a worker can only lose their annual paid leave entitlement if the employer can demonstrate they provided the worker with the opportunity to take leave and informed the worker that the paid leave would not carry over at the end of the year. Any employer failing to do so will owe the worker payment for any accumulated untaken leave that the worker was eligible for throughout the duration of their contract once the contract ends.
Due to unclear practices and weak regulations, some umbrella companies have withheld leave pay from umbrella workers without repercussion. Now, umbrella companies may be held accountable for any unpaid leave entitlements owed to their workers following this ruling.
Employers should verify that they are providing paid leave and the proper notices to all workers following this Supreme Court decision. This case overturned a lower court ruling, so keeping up with cases and appeals that affect financials is essential to remain compliant and avoid costly claims.
EU: Leave Directive Changes Coming Soon
European Union (EU) member states have until early August 2022 to implement national laws outlining minimum requirements for paternity, parental and carers’ leave for all workers. Based on EU Directive 2019/1158, the goal of the mandate is to encourage work-life balance and flexible working arrangements that will help increase labor equality between men and women.
Fathers or second parents are entitled to a minimum of 10 working days of paid leave regardless of marital status under the paternity leave section of the Directive. The person taking leave will receive pay at least equivalent to the national sick leave pay amount. For parents, the Directive expands on the four months of unpaid parental leave already available. Two of those four months will become paid leave and will no longer be transferable from one parent to the other to encourage fathers to take their leave instead of transferring it.
Workers will also be entitled to five days of unpaid carers’ leave annually. Paid leave for caregivers is encouraged, but the conditions of the caregivers’ leave will be left up to each member state to determine.
In addition to the leave requirements, the EU included a section in the Directive giving workers caring for children up to eight years old the right to request flexible working arrangements, such as reduced working hours and work location flexibility. If a request is accepted by an employer, the duration of the arrangement may not exceed six months.
Each member state must establish who is considered a parent or a family and how the requirements may be adapted to suit families with single parents, adoptive parents or multiple births. Since member states also have the power to pass legislation that enhances the minimum requirements for each aspect of the legislation, it’s crucial for employers operating across the EU to ensure they are compliant with state-specific nuances.
Spain: Labor Reforms Impact Temporary Workers
The Spanish government has passed labor reforms amending article 15 of the Workers' Statute in an effort to reduce the number of temporary labor contracts and promote permanent hiring. The reforms will limit the reasons workers are allowed to enter into temporary or fixed-term contracts and reduce the maximum length of contracts to six months in many cases.
Under the reforms, temporary or fixed-term contracts will only be allowed for organizations facing temporary peaks in production demand outside of normal company activity, to carry out tasks within the framework of contracts or administrative assignments, to replace workers temporarily who are entitled to return to their jobs or to cover a vacancy short-term. Temporary labor will no longer be allowed for projects that last up to three years.
Companies will have until March 30, 2022, to implement the new reforms. After that, companies engaging temporary workers found in breach of the requirements will be required to change the temporary worker’s status to permanent and notify them in writing of their status change.
These reforms are amending existing labor regulations from 2012 that included more lenient restrictions around temporary contracts. Companies that engage temporary workers may want to start preparing for these changes to avoid costly classification errors, including determining which roles are eligible for temporary workers and which roles should be moved to permanent.
Australia: Visa Changes Impact Thousands of Workers
The Australian government announced it will provide an opportunity for permanent residency for some skilled migrants and increase the duration of visas for eligible international students to work in the country post-graduation.
The changes for skilled migrants will allow around 200,000 people who hold either a temporary skill shortage visa or a now-discontinued 457 temporary business visa who remained in Australia during the pandemic to apply for residency. Before this change, those who held short-term skill shortage visas could only stay in Australia for two years and did not have a path to permanent residency.
The education and immigration ministers have also approved changes to student visas. These changes will give 30,000 students with 485 temporary graduate work visas that expired after February 1, 2020, the opportunity to reapply for a new 485 visa. Students who graduate from masters by coursework programs will be able to work in Australia for three years, and vocational graduates will be able to work in Australia for two years.
The government updating its visa policies to allow international students back in the country to work is a welcome change in a tight labor market. Companies can consult with a workforce expert to ensure they’re able to take advantage of these international workers and maintain compliance with new government guidelines.
China: Women’s Rights Legislation Proposed
A proposed amendment to the Women’s Rights and Interests Protection Law would increase legal protections against gender discrimination for women in the workforce. Under the amendment, employers would no longer be able to state gender preferences in job descriptions or ask female applicants about their marital or pregnancy status.
This legislation would enhance existing gender discrimination laws by providing clearer definitions of discriminatory practices and legal ramifications. While the bill will require more revisions, it could pass this year. Employers would be required to set up procedures to prevent discrimination and systems to investigate and respond to reported incidents if the legislation is adopted.
Employers should be aware that this gender discrimination law could change for the first time in three decades. With no recent amendments to this law, many employers would need to review their current practices for necessary updates and ensure a reporting system is created. Experts with experience in worker’s rights and anti-discrimination laws are a great resource to advise on implementing new laws and best practices.
Singapore: Government Renews Labor Support Agreement
The United Nations’ International Labor Organization (ILO) and Singapore’s Ministry of Manpower (MOM) have agreed to continue their partnership supporting joint labor activities through 2023. The partnership between the organizations covers governments, employers and workers throughout the ASEAN region and has been active since 2011.
The agreement focuses on several main areas of action, including occupational safety and health; fostering cooperation between governments, employers and workers; and other general workplace and labor practices. Moving forward, the partnership will emphasize knowledge-sharing and building workforce capabilities in preparation for the future of work in the region.
The agreement also includes strengthening the ILO’s Decent Work aspects of the ASEAN regional integration process, ensuring availability of opportunities, fair incomes, safeguards on basic rights, equal treatment and more.
Partnerships that support the workforce and employers are increasingly important in developing safe, transparent and legally compliant workplaces. While government activities are helping to prepare companies for the future of work in the region, a knowledgeable workforce solutions partner can provide insight to navigate new resources and opportunities as they arise.
This update contains general information only, and AGS is not rendering legal advice. Before making any decision or taking any action that may affect your business, you should consult qualified legal counsel. AGS shall not be responsible for any loss whatsoever sustained by any person or company who relies on this update.