Employment & Labor Blog

Labor Law

Why All Employers Should Understand Protected Concerted Activity

Recently, a client asked me to draft a policy which prohibits employees from writing or saying negative comments about other employees. The client was concerned about the toxic environment that was developing in the workplace because of social media posts. I explained to my client that the National Labor Relations Act (“NLRA”) prohibits employers from restricting or prohibiting employees from discussing workplace issues. Employers often fail to realize that the NLRA can protect employees even in non-union workplaces. One such scenario involves concerted activity, which refers to situations where employees act together, or on behalf of one another, to improve their wages, hours, or working conditions. These activities are protected, whether a workplace is unionized or not. What is Protected Concerted Activity? Protected concerted activity is broadly thought of as an activity involving two or more employees, or one employee acting on behalf of others, relating to workplace conditions like scheduling, wages and benefits, safety or management practices. Examples may include a group of workers raising concerns about workplace safety, organizing to request schedule changes, or discussing pay or benefits with each other and/or management. It can also include one employee speaking to management on behalf of a group of employees about these types of issues. An employee’s right to engage in concerted protected activity means that the employer may not discharge, discipline, threaten or coercively question an employee on the basis that the employee engaged in the protected activity. Common Policy Risks to Avoid This topic is relevant for all employers because company policies may be problematic even if they unintentionally restrict employees’ rights. Common areas of risk include: Social Media Policies: Broad statements like “employees may not post negative comments about the company or its employees” may unlawfully restrict an employee’s right to discuss workplace issues even outside of work. The language in a social media policy should be drafted so that it could not reasonably be construed to infringe on employees’ rights to protected concerted activity under the NLRA. Confidentiality: While employees may not disseminate trade secret or confidential information, employees generally have a right to discuss wages and working conditions. Workplace Conduct: Policies requiring employees to always be positive or respectful may be problematic if applied to limit legitimate discussions about workplace issues or complaints. Complaint Reporting: Open door policies are generally considered a good practice, but employers should not actively discourage employees from discussing workplace issues with each other before going to management. Recording Policies: Employers should refrain from prohibiting outright all recording of company meetings and conversations. Although it is lawful to prohibit recording of confidential and trade secret information, a complete prohibition of any and all discussions and meetings may infringe on an employee’s right to record protected concerted activity. Recommendations for Employers Company policies should be specifically tailored to define unacceptable workplace behavior while avoiding vague language such as “prohibiting inappropriate discussions” or “making negative statements.” Policies should also be drafted to protect legitimate business interests without restricting employee discussions about workplace conditions. Finally, policies should be consistently enforced in the workplace and regularly reviewed by legal counsel to ensure compliance. Larkin Hoffman’s labor and employment attorneys can assist in creating and administering workplace policies that avoid potential NLRA violations. Contact us to learn more.

New Employment Laws

Reminder: Minnesota’s Paid Family Leave Law is Coming Soon

We first reported on Minnesota’s Paid Family Leave Law (PFL) in 2023, in which we described the basics of the law and the eventual effects on employers operating in the state. Although a number of updates and clarifications have been made since 2023, the effective date of January 1, 2026 has not changed. The following is a quick primer on the basics, including some changes since we first reported on the law. A Reminder of the Basics The law broadly covers nearly every employer, regardless of business size, revenue or number of employees. It covers nearly every employee, including full time, part time, temporary and most seasonal workers but contains limited exceptions for self-employed individuals, independent contractors and seasonal employees.  Benefits will be available to eligible employees who are unable to perform their work due to one of the following reasons: A serious health condition of the employee or their family member Safety leave To provide family care Bonding leave Pregnancy or recovery from pregnancy Military family leave “Family member” includes the employee’s spouse or domestic partner, child (including biological, adopted, step, or foster children, or a child raised by the employee even if not legally related), parent or legal guardian, sibling, grandchild, grandparent or spouse’s grandparent, son-in law or daughter-in-law or anyone close to the employee who depends on the employee like family, even if not related by blood. To qualify, an employee must also have earned at least $3,700 (or 5.3% of the state’s average annual wage) during the last twelve months, submit a completed certification form confirming the condition or need for time off and have PFL leave available. Employees can take up to twelve weeks of paid family leave or twelve weeks of medical leave in a single benefit year. Leave can be taken in multiple blocks for added flexibility. Employees who need both family and medical leave during a benefit year are eligible to take a combined twenty weeks of leave. Paid leave payments are made by the state directly to the employee and is funded through premiums that are split between employers and employees. Employees in their current role for at least ninety days who take PFL are entitled to return to the same or an equivalent position when they return to work, and employer benefits are maintained during an employee’s leave. Employers are prohibited from discriminating or retaliating against employees for taking PFL. Updates You Might Have Missed 1. Expanded Eligibility The law allows self-employed individuals to contribute to the PFL fund, making them eligible for the benefits as well. 2. Increased Benefit Amounts The premium rates have been increased to 0.88 percent. The statute permits the rate to be adjusted annually. Employees can receive up to 90% of their weekly wages during their leave, with a cap on the maximum payout. The maximum benefit amount has been increased to $1,372.00 per week. What Should You Be Doing Now? Familiarize yourself with the eligibility requirements. Understand wage replacement rates and weekly benefit calculations to ensure your payroll processing team is prepared. Begin updating employee handbooks, other internal policies, and leave request forms to include PFL. Train your Human Resources staff and communicate with your employees. Considering that employees will be eligible to take PFL beginning on January 1, 2026, now is the perfect time to ensure that all stakeholders understand what is required to comply with the law. Employers with questions about the PFL law should contact Nic Puechner at (952) 896-3297 or npuechner@larkinhoffman.com.

New Employment Laws

Potential Implications of Using Artificial Intelligence to Drive Employment Practices

It is no secret that the use of artificial intelligence, or “AI,” is increasing every day in every sector of life. Thus, it should come as no surprise that employers are turning to AI to assist with a wide range of employment practices, including hiring and recruitment, measuring employee performance metrics and enhancing workplace efficiencies. However, employers utilizing AI in their employment practices must ensure that they are doing so without violating any state laws. A Patchwork Approach to AI Regulation in Employment We see the beginnings of a patchwork-style approach to regulating the use of AI in employment law practices, with several states introducing or enacting laws that impose restrictions and requirements on AI-driven employment practices. New York’s governor Kathy Hochul recently announced a proposal that the state’s Worker Adjustment and Retraining Notification (WARN) Act be expanded to require businesses with 50+ employees to report AI-driven layoffs, which would make New York the first state to impose transparency on employers who utilize AI to replace jobs typically performed by humans. Illinois recently amended its Human Rights Act in two notable ways with respect to the use of AI. First, an employer commits a civil rights violation under the Act if it uses AI that has the effect of subjecting employees to unlawful discrimination or uses zip codes as a proxy for protected classes. Second, an employer commits a civil rights violation if it fails to notify employees of the use of AI in making employment decisions. The new law is relatively broad and applies to all employers employing one or more employees in the state. This law is currently scheduled to take effect January 1, 2026. Colorado’s law is aimed at preventing “algorithmic discrimination” when “high-risk” AI systems are used to make, or are a “substantial factor” in making, “consequential decisions” when utilized. Thus, an employer’s use of AI tools that play a “substantial factor” in employment decisions in hiring, retention, or promotion may likely be considered “high-risk” AI systems subject to the law. The law is currently scheduled to take effect February 1, 2026. California’s Attorney General has issued legal advisories reinforcing that AI is already subject to existing laws and that an employer’s use of AI to drive employment decisions are not exempt from anti-discrimination and privacy laws. Minnesota's Emerging AI Regulations Although no such law has been enacted in Minnesota yet, it may be coming. On February 11, 2025, the Minnesota Senate’s Committee on Labor convened to discuss the need for regulatory measures to protect workers from potential risks of AI in the workplace. This means that Minnesota has now joined over thirty states that have formed some version of an AI taskforce to issue recommendations that will inevitably inform additional legislation. Employer Considerations Amidst Changing AI Regulations Due to this rapidly changing legal landscape, employers already utilizing AI in employment practices should review the use of such technologies to ensure they are not creating additional risks. In addition, employers should also evaluate their contracts with AI developers to ensure the product they receive will not violate state anti-discrimination laws, as the new AI laws generally do not enable employers to escape liability merely because they did not develop the AI product being utilized in the workplace. Need Assistance? If you have any questions or would like help finding additional resources, please reach out to me at npuechner@larkinhoffman.com.

Drugs and Alcohol

Navigating the Legalization of Marijuana: Updating Drug and Alcohol Policies

Last week, we posted a blog addressing how the recent legalization of recreational cannabis in Minnesota may affect employee drug-testing policies. We now direct our attention to employers with questions about their general drug and alcohol policies. Here are some things to consider when changing an existing drug and alcohol policy. Understanding the Law As discussed in the prior blog, the Minnesota Drug and Alcohol Testing in the Workplace Act (“the Act”) has always prohibited impairment in the workplace, and that has not changed. Under the new law, an employer is not required to permit or accommodate cannabis use, possession, impairment, sale, or transfer while an employee is working or while an employee is on the employer’s premises, or operating the employer’s vehicle, machinery, or equipment. Therefore, even though another Minnesota law, the Consumable Products Act (the “CPA”), prohibits an employer from restricting an employee’s lawful off-duty use of cannabis, nothing in the law requires employers to accommodate or permit an employee’s on-the-job possession or use. Review Your Drug and Alcohol Policy When looking to an existing drug and alcohol policy, employers should pay attention to ensure that the policy does not restrict an employee’s off-duty rights. For instance, we often see policies that broadly prohibit an employee’s use of “controlled substances” unless prescribed by a physician for treatment. Marijuana and cannabis products are no longer considered “controlled substances” as they were prior to August 1st of this year, so that prohibition is problematic under the law. In light of this definitional shift, and because pursuant to the CPA an employer may not discipline or discharge an employee because he or she engages in the lawful use of cannabis products off-premises during nonworking hours, employers should consider an impairment-based policy instead. By shifting the focus to what is prohibited while at work, the employer eliminates the risk of restricting what the employee is legally free to do during their off time. Train Supervisors Minnesota law continues to permit an employer to discipline, discharge or take other adverse personnel action against an employee for using, possessing, selling or being impaired while an employee is working, on the employer’s premises, or operating the employer’s vehicle machinery, or equipment. The Act allows an employer to take adverse action against an employee if, as the result of consuming cannabis, the employee “does not possess that clearness of intellect and control of self that the employee otherwise would have.” The person most likely to identify an employee who meets this standard is the employee’s supervisor. Employers should provide employers with training on the symptoms of impairment that can result from use of cannabis products so that supervisors can recognize an impaired employee. Supervisors should be made aware of their critical role in evaluating whether an employee is impaired as a result of using cannabis. Considerations for Job Applicants Employers should be mindful of how the legalization of cannabis alters the rights of not only existing employees but applicants as well. The CPA also protects an applicant’s use of lawful consumable products off the employer’s premises during nonworking hours. Therefore, regardless of whether an employer actually conducts pre-employment testing, the law now makes it unlawful to withdraw an offer of employment based on the candidate’s off-duty, off-premises use of marijuana and cannabis products. Conclusion With the passage of Minnesota’s recreational cannabis law, employers will need to revisit their drug and alcohol policies, as well as any hiring policies and practices affected by the law, to ensure they are legally compliant. Employers need to work with supervisors to assist in recognizing an employee who, as the result of consuming cannabis products, does not possess the clearness of intellect and control that the employee usually has. Employers who have questions about any of this new legislation should contact a Larkin Hoffman attorney.

Drugs and Alcohol

Navigating the Legalization of Marijuana: Update Your Drug and Alcohol Testing Policies

On August 1, 2023, recreational marijuana and cannabis products became legal in the state of Minnesota. Employers are now asking how this new law affects their employment policies and procedures. In the first of a two-part series of blog posts on how the legalization of marijuana affects drug and alcohol polices, we address whether employers need to modify their drug and alcohol testing policies in light of this significant change in the law. Here are some things to consider in changing existing testing policies and procedures. Understanding the Law Employers are concerned that employees are now allowed to come to work stoned. In fact, the opposite is true. The Minnesota Drug and Alcohol Testing in the Workplace Act (“the Act”) has always prohibited impairment in the workplace, and that has not changed. Under the law, an employer is not required to permit or accommodate cannabis use, possession, impairment, sale, or transfer while an employee is working or while an employee is on the employer’s premises or operating the employer’s vehicle, machinery, or equipment. Although an employer is not permitted to restrict an employee’s lawful off-duty use of cannabis, Minnesota law does not require that employers accommodate or permit an employee’s on-the-job possession or use. Consequently, drug and alcohol policies should include a provision explicitly prohibiting the use of cannabis, drugs and alcohol while working, operating company vehicles or on company premises. Review Your Drug and Alcohol Testing Policy The first step in modifying an existing drug and alcohol testing policy is to review the portion of the policy which prohibits the use of drugs (and alcohol) while working. With certain exceptions, which will be discussed below, the Act removes marijuana and cannabis products from the definition of “drug” for purposes of drug testing, and the substance is now considered separate from drugs and alcohol. Therefore, the definition of “drug” in the policy should no longer include cannabis; nor should it be so broad that it encompasses personal use of the substance off-premises during nonworking hours. Drug and alcohol testing policies should add cannabis to the provision prohibiting the use of drugs and alcohol while working, operating company vehicles or on company premises (e.g. “The Employer prohibits the use, possession, impairment, sale, or transfer of cannabis, drugs, and alcohol…”). When is Drug Testing Allowed? It is permissible to test for cannabis under the new law under certain scenarios, most of which will be familiar to employers with existing drug and alcohol testing policies. Employees may be subject to random testing for cannabis while working in safety-sensitive positions. Employees may also be tested when there is reasonable suspicion that they: Are under the influence of cannabis or other drugs; have violated the employer’s written work rules prohibiting the use, possession, sale, or transfer of cannabis, drugs, or alcohol; have sustained (or caused another to sustain) a personal injury; or have caused a work-related accident or were operating or helping to operate machinery, equipment, or vehicles involved in a work-related accident. Employees may also be tested during the post-treatment period (up to two years, depending upon the employer’s policy). Despite the fact that employers may still test under these circumstances, many drug and alcohol testing policies will nevertheless need to be amended because they have defined prohibited drugs to be those governed by the federal Controlled Substances Act, and while cannabis is a prohibited controlled substance under federal law, it is not a prohibited substance under Minnesota law. Under most circumstances, testing applicants for cannabis is no longer permissible, and the detection of marijuana in a drug test cannot be used as a reason for rescinding a job offer. However, for the following specific positions, applicants may continue to be tested for cannabis: Safety sensitive positions (jobs where impairment caused by cannabis usage would threaten the health and safety of any individual) Peace officers and firefighters Positions requiring face-to-face care, training, education, supervision, counseling, consultation, or medical assistance to children, vulnerable adults, or patients receiving medical, psychiatric, or mental health care services Positions requiring a commercial driver’s license or operating a motor vehicle for which state or federal law mandates drug or alcohol testing Employment funded by a federal grant or any other position for which state or federal law requires testing a job applicant or employee for cannabis Additionally, the employee protections for the use of marijuana as described above do not apply to all employees. There are exclusions when the specific work being performed requires that employees and job applicants undergo drug and alcohol testing or cannabis testing where: Federal regulations preempt state regulations regarding drug and alcohol testing or cannabis testing for specific employees and job applicants; Federal regulations or requirements are necessary for operating facilities under federal regulation; Drug and alcohol testing or cannabis testing is conducted pursuant to federal contracts for security, safety, or protection of sensitive or proprietary data; or State agency rules adopt federal regulations applicable to the interstate component of a federally regulated industry and the adoption of those rules is for the purpose of conforming the non-federally regulated intrastate component of the industry. Conclusion Considering marijuana’s lingering presence in the bloodstream, some employers might forgo testing altogether. However, those employing workers in safety-sensitive positions are likely to have a different perspective, since an employee coming to work under the influence could cause serious accidents, injury and even death to themselves or others. One thing is certain—all employers must reconsider their drug and alcohol testing policies to account for the legalization of recreational marijuana and cannabis products.

Drugs and Alcohol

Legalized Recreational Marijuana Use Has Arrived in Minnesota

The Minnesota legislature has passed a bill permitting recreational marijuana use by adults, making Minnesota the 23rd state to legalize cannabis. Governor Walz is expected to sign the bill, which establishes a complex regulatory framework for the newly legalized product.  Among many other statutes, the new law contains a number of provisions that will affect employers doing business in Minnesota. Medical Marijuana The new law maintains the state’s medical marijuana program and continues to provide employment protections for a patient enrolled in the registry program.  As previously discussed here unless a failure to do so would violate federal or state law​ or regulations or cause an employer to lose a monetary or licensing-related benefit under​ federal law or regulations, an employer may not discriminate against a person in hiring, termination, any term or condition of employment, or otherwise penalize a person, if the discrimination is based on either of the following: The person’s status as a patient enrolled in the registry program; or A patient’s positive drug test for cannabis components or metabolites, unless the patient used, possessed, or was impaired by medical cannabis on the premises of the place of employment or during the hours of employment. The law permits an employee who is a patient to present the employee’s registry verification to explain a positive drug test. Use of Off-Duty Lawful Consumable Products Minnesota law already prohibits an employer from discriminating against an applicant or employee because the employee has engaged in the use or enjoyment of lawful consumable products if the use or enjoyment takes place off the employer’s premises during nonworking hours unless the restriction: Relates to a bona fide occupational requirement and is reasonably related to employment activities or responsibilities of a particular employee or group of employees; or Is necessary to avoid a conflict of interest or the appearance of a conflict of interest with any responsibilities owed by the employee to the employer. The new law adds cannabis to the state’s definition of “lawful consumable product.” Thus, an employer may not fire, discipline, or refuse to hire an individual for his or her use or enjoyment of cannabis (or products containing cannabis) outside of work during nonworking hours. Drug Testing in the Workplace Minnesota’s Drug and Alcohol Testing in the Workplace Act (“DATWA”) has historically permitted employers to test for cannabis as a substance considered a “drug” under the state’s schedule of controlled substances. The new law amends DATWA in several ways. First, it imposes a general prohibition on testing job applicants for cannabis or otherwise using cannabis test results to make hiring decisions. However, existing testing requirements would continue to apply to (1) a safety-sensitive position; (2) a peace officer; (3) a firefighter; (4) a position working directly with children, vulnerable adults, or healthcare patients; (5) a position requiring a commercial driver’s license or requiring testing for motor vehicle operation; (6) a federally funded grant position; or (7) any other position where state or federal law require testing. Second, since the new law no longer treats cannabis as an “illegal drug,” a test for cannabis is now considered separate from a test for other prohibited drugs.  The practical effect of this is that employers may not, for instance, conduct a random test for cannabis if the employee is not employed in a safety-sensitive position, and reasonable suspicion testing and treatment program testing (for cannabis) may be conducted under circumstances that would generally permit a drug or alcohol test. DATWA’s requirements that employees be issued written notice of the employer’s drug-testing policy remain unchanged. Therefore, employers should plan on revising any existing drug-testing policies to conform to the new law. Workplace Cannabis Policies Despite the enactment of laws permitting the recreational use of cannabis for adults, employers are not required to permit or accommodate cannabis use, possession, sale, transfer, or impairment while at work, on work property, or operating the employer’s vehicle, machinery, or equipment. An employer may create written policies addressing such prohibitions. Employers with questions about the application of this new statute and the appropriate immediate actions to address it should consult a Larkin Hoffman attorney.

Discrimination

Supreme Court Holds that Employers May Not Discriminate Against Workers on the Basis of LGBTQ Status

In October 2019, we published a blog post covering a series of three cases taken up by the U.S. Supreme Court that addressed the question of whether discrimination based upon sexual orientation and gender identity is illegal under Title VII of the 1964 Civil Rights Act (“Title VII”). Today, we follow up with this post to announce that the Supreme Court, by a vote of 6-3, ruled that Title VII’s prohibition on discrimination on the basis of sex includes discrimination based on gender identity or sexual orientation. Two of the cases (Bostock v. Clayton County, Georgia and Altitude Express, Inc. v. Zarda) involved gay male plaintiffs who claim they were fired due to their sexual orientation. The third case (R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC) involved a female plaintiff who was fired after she disclosed her status as transgender and refused to wear a suit and tie. In each of the cases, an employer terminated a longtime employee for no reason other than his or her status as a gay or transgender individual. All three plaintiffs argued that such discrimination is illegal under Title VII because the law expressly prohibits discrimination on the basis of “sex.” The Court agreed. Writing on behalf of the Court, recently-appointed Justice Neil Gorsuch acknowledged that, when Congress enacted the Civil Rights Act, it likely was not contemplating that it would lead to the protection of LGBTQ individuals. However, in the years since the enactment of the Civil Rights Act, the Court has been called upon to determine other issues that also were not addressed by the drafters of the Act, such as whether it covers discrimination on the basis of motherhood or whether it bans sexual harassment of male employees. As Gorsuch noted, “the limits of the drafters’ imagination . . . supply no reason to ignore the law’s demands.” Until now, states have acted in a patchwork manner to extend protections based on sexual orientation and gender identity. For instance, it has been illegal in Minnesota to discriminate against an individual on the basis of either sexual orientation or gender identity. However, while Wisconsin was the first state to ban employment discrimination based on sexual orientation, the law did not extend to prohibit discrimination based on gender identity. Because fewer than half of the fifty states currently ban discrimination on sexual orientation and gender identity on a statewide level, this decision is considered a landmark victory for LGBTQ employees across the country.

Labor Law

DOL Issues Temporary Rule Addressing Health Care Coverage, Intermittent Leave, and Returning to Work

Millions of small businesses have been awaiting further guidance on the Family First Coronavirus Response Act (“FFCRA”), which applies to private businesses with fewer than 500 employees. On April 6, 2020, the U.S. Department of Labor published its temporary rule issuing regulations pursuant to the FFCRA.  This article will discuss the U.S. Department of Labor’s guidance on continuation of health care coverage for employees using paid sick leave under the Emergency Paid Sick Leave Act (“EPSLA”) or expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), under what circumstances an employee is eligible to take intermittent leave, and what the requirements are for an employee’s return to work. Continuation of Health Care Coverage for Employees on FFCRA Leave An employee taking paid sick leave or expanded family and medical leave under the FFCRA is entitled to continued coverage under the employer’s group health plan on the same terms as if the employee did not take leave.  Employers must continue to maintain the same group health plan benefits provided to the employee and any family members covered under the plan as was available prior to taking leave, and the employee remains responsible for paying the same portion of the plan premium that the employee paid prior to taking leave. Intermittent Leave There is no requirement that employers must permit employees to take FFCRA-based leave on an intermittent basis; rather, employees may take paid sick leave or expanded family and medical leave intermittently if the employer and employee agree.  It is preferable that this understanding be memorialized in a written agreement, but the rule states that “a clear and mutual understanding between the parties is sufficient.” Teleworking An employee who is teleworking may take intermittent leave for any qualifying reason in any agreed increment of time so long as there is an agreement between the employee and his or her employer.  There are few constraints on an employee’s use of intermittent leave while teleworking because there are no risks that the employee is introducing COVID-19 into the employer’s remaining workforce at the job site. Workers at the Job Site However, if the employee is still working from the employer’s regular job site, there are certain circumstances that would limit the ability to use leave intermittently notwithstanding an agreement between the employer and employee.  Namely, an employee still reporting to the job site may only take intermittent leave in circumstances where there is a minimal risk that the employee will spread COVID-19 to other employees at the job site. For instance, an employee may take intermittent leave to take care of a child whose school or place of care is closed because the absence of confirmed or suspected COVID-19 poses no greater risk of spread to the job site.  But if an employee begins taking leave for any qualifying reason other than lack of child care (i.e. direct COVID-19 illness or caring for a family member with COVID-19), the employee must continue taking leave each day until the employee either uses the full amount of paid sick leave or no longer has a qualifying reason for taking paid sick leave because, under these circumstances, there is an unacceptably high risk that the employee might spread COVID-19 to other employees at the job site. Reminder: Expanded family and medical leave does not increase the amount of allowable FMLA leave.  If an employee has already taken regular FMLA leave, the maximum twelve weeks of EFMLEA leave is reduced by the amount of FMLA leave entitlement taken in that year.  However, if the employee has exhausted the twelve workweeks of FMLA or EFMLEA leave, he or she may still take paid sick leave under the EPSLA for a COVID-19 qualifying reason.  Likewise, an employee’s use of paid sick leave under the EPSLA does not prevent the employee from taking expanded family and medical leave under the EFMLEA. Employees Returning to Work after FFCRA Leave Like with other FMLA leave, an employee is entitled to be restored to the same or an equivalent position after taking paid sick leave or expanded family and medical leave under FFCRA.  However, an employee is not protected from employment actions, such as layoffs, that would have affected the employee regardless of whether the leave was taken.  For example, an employer may demonstrate that it had to close the job site for legitimate business reasons. In addition, an employer may refuse to return an employee who took FFCRA leave to his or her same position if the employee is a highly compensated “key” employee as defined by the FMLA (i.e. a salaried FMLA-eligible employee who is among the highest paid 10 percent of all employees employed by the employer within 75 miles of the employee’s job site) and if the restoration of the employee will cause “substantial and grievous economic injury to the operations of the employer.” Employers with Fewer than 25 Employees The return-to-work provisions under the FFCRA do not apply to an employer who has fewer than 25 employees if all four of the following conditions are met: The employee took leave to care for a child whose school or place of care was closed; The employee’s position no longer exists due to economic or operating conditions that affect employment and are caused by COVID-19 related reasons during the period of the employee’s leave; The employer made reasonable efforts to restore the employee to the same or an equivalent position; and If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available for one year beginning either on the date the leave related to COVID-19 reasons concludes or the date twelve weeks after the employee’s leave began, whichever is earlier.

General Matters

It’s Complicated – Understanding the Impact of Non-Discretionary Bonuses on Overtime Pay

The Fair Labor Standards Act (“FLSA”) defines certain employees as exempt and others as nonexempt.  Nonexempt employees are generally entitled to receive overtime pay at a rate of at least one and one-half times the employee’s regular rate of pay.  Overtime is often easy to calculate on straight weekly earnings, but what happens when employees earns a bonus on top of their regular rate of pay?  The answer is that it depends. Discretionary vs. Nondiscretionary Bonuses Bonuses can be considered discretionary or nondiscretionary.  Bonuses are discretionary if the employee has no expectation of payment, the employer retains freedom to decide the amount and timing of payment, and the bonus is not tied to meeting specific goals.  These types of bonuses are not reflected in overtime rate calculations.  Nondiscretionary bonuses, on the other hand, are those that are provided to employees in an effort to encourage them to work more efficiently, rapidly or those that encourage employees to remain with the employer.  Nondiscretionary bonuses can include such things as hiring bonuses, attendance bonuses, production bonuses, retention bonuses, profitability bonuses, or bonuses tied to quality and accuracy of work.  These types of bonuses are the kind that must be considered part of a nonexempt employee’s total wages for the purposes of calculating overtime. Overtime Rate and Nondiscretionary Bonus The FLSA requires that overtime pay be calculated on an employee’s regular rate of pay, and any nondiscretionary bonuses an employee earns must be factored into the employee’s regular rate of pay.  This is relatively easy to calculate when bonuses are earned and paid during the pay period, but recalculating the regular rate of pay becomes much more difficult when bonuses are earned over a series of pay periods, such as quarterly or annually. Because certain bonuses are not earned until well after the pay period, it is permissible for an employer to disregard the bonus when initially computing the regular rate (and overtime) of pay, but once the bonus becomes known and is paid, the employer is required to retroactively recalculate the regular rate of pay for each workweek in which the bonus was earned in order to pay additional overtime compensation on the bonus.  So how exactly is this done? As explained by the Department of Labor, if an employee receives a productivity bonus of $2,000 after six months, the employer is required to calculate any additional overtime earnings the employee is due for each week the employee worked overtime hours.  Overtime is not being calculated retroactively for all wages paid—the employee already received overtime pay on his or her base wage—it is calculated on the additional wages, i.e. the bonus, and only one half of the increase in the regular rate of pay is due for each overtime hour worked. For purposes of this example, suppose that the employee worked 50 hours (10 hours of overtime) in the 9th week of the bonus period.  The calculations would be done as follows: Step 1:  $2,000 ÷ 26 weeks (6 months in bonus period) = $76.92 Step 2:  $76.92 ÷ 50 hours (total hours worked in week nine) = $1.54 (increase in the regular rate) Step 3:  $1.54 x ½ = $.77 (increase in the additional overtime premium rate) Step 4:  $.77 x 10 hours of overtime = $7.70 (increase in overtime earnings) Employers engaging in these calculations must do the same calculation for each week of the bonus period in which the employee worked overtime hours.  This can undoubtedly feel like a daunting process for an employer, so it is important to keep records of hours worked on a week-by-week basis.

Navigating Zero-Tolerance Drug Policies in a Cannabis “Friendly” Climate

Recently, Quest Diagnostics, a company offering drug-testing services to employers, issued a report highlighting year-over-year double-digit increases in positive urine tests for marijuana between 2015–2017 in almost one-third of all U.S. industry sectors.  The company has catalogued over thirty years of national workplace drug positivity trends, and it reports significant increased positive tests both in the general workforce and the federally-mandated, safety-sensitive workforce.  The increased rates of positive detections have been most “striking” in states that have enacted recreational use statutes.  The data clearly shows that, across the board, more working adults are using marijuana than any other time in recent history. This puts employers in a precarious position.  Employers are tasked with maintaining productivity and safety within the workplace, but as the country trends toward greater legalization, more and more employees are consuming marijuana in their free time.  Standard drug tests measure whether an individual has used marijuana, not whether the individual has used the drug on the job or whether he or she is impaired.  There are no current proven technologies available on the market to test a marijuana user’s level of impairment.  This makes testing for marijuana different from testing for other substances, including alcohol.  Each marijuana user metabolizes the plant differently, and a test may produce a positive result long after an individual has used the drug.  As such, an employee or potential employee may test positive even though there are no concerns with on-the-job impairment. To further complicate matters, particularly for companies with locations in more than one state across the region, an employer’s right to discipline an employee for a positive drug test may differ depending on where the employer is located.  In Minnesota, unless a failure to discipline would violate federal law or regulations or cause an employer to lose a monetary or licensing-related benefit under federal law or regulations, employers may not discriminate against an employee because he or she is a patient enrolled in the state’s medical marijuana registry program or because the patient tests positive for cannabis components or metabolites.  There are exceptions if the patient used, possessed, or was impaired by medical cannabis at the place or employment or during the hours of employment.  Minnesota is the only state in the immediate region to offer such affirmative protections. Some employers are required to screen for marijuana pursuant to state or federal job contracts.  Absent these factors, employers are free to adopt policies that work for their business.  Across the country, some employers who are not otherwise mandated to test are transitioning from a zero-tolerance workplace model to one that does not test for marijuana use.  In large part, this is driven by a tight labor market.  As certain sectors of the labor market experience a labor shortage, employers in those sectors may find that testing for marijuana use for applicants in non-safety-sensitive positions is not worth the cost, and employers who continue to maintain zero-tolerance drug policies may find their pool of potential hires limited. For many employers, maintaining a zero-tolerance drug policy will continue to make sense and those employers are free to restrict marijuana use to the fullest extent permitted by law.  But other employers may find that switching from a zero-tolerance policy to an impairment-based policy affords them the leeway to hire otherwise-qualified employees who may be excluded through blanket drug testing.  Regardless of whether an employer continues to test for marijuana or not, it is important that marijuana policies be communicated clearly.

Minnesota Worker’s Compensation Claims Involving Medical Marijuana

  Cannabis remains illegal under federal law as a Schedule I drug, leaving states to craft their own marijuana-related laws in true patchwork fashion.  By now, most states have enacted at least some form of medical marijuana law.  State officials increasingly understand the benefits of medical marijuana for patients who have qualifying medical conditions.  But acceptance does not necessarily create clarity in the law.  What happens when an employee with a qualifying medical condition seeks reimbursement for medical marijuana through an employer’s workers’ compensation plan?  As with any cannabis-related question, the answer depends on the state in which the claim is made. For purposes of workers’ compensation claims, a key question is whether medical marijuana use is considered a reasonable and necessary medical treatment.  Some states expressly permit such claims, others flatly deny them, and still others take a middle approach.  In many states, this issue has resulted in extensive litigation.  Minnesota has avoided the need for such litigation by being one of the few states that permit claims for medical cannabis under an employer’s workers’ compensation plan. In July 2015, the Minnesota Department of Labor and Industry enacted new rules that redefine “illegal substance” to exclude a patient’s use of medical cannabis permitted by Minnesota law.  In other words, since 2015, medical marijuana has been a reimbursable form of medical treatment for workers’ compensation claims within the state.  In no small part, this is due to an increasing medical consensus that certain prior treatment protocols (i.e., long-term treatment plans involving opiate prescriptions) are no longer advocated for as strongly as they once were, particularly for post-injury intractable pain.  In fact, in Minnesota, legislators have determined that long-term treatment with opioid analgesic medication is expressly not the preferred approach for the treatment of workers’ compensation injuries unless certain stringent requirements are met. It is important to remember that just because an employee has a qualifying medical condition and is registered in Minnesota’s medical marijuana program does not mean he or she will automatically be entitled to workers’ compensation benefits.  As always, claims are reviewed on an individual basis, treatment must be both medically necessary and reasonable, and there may be other disqualifying reasons.  But for employers based in Minnesota, the state has provided a pathway forward for workers’ compensation claims involving treatment by medical cannabis.   As such, employers should process employee claims involving medical marijuana as they do all other workers’ compensation claims.

Does Marijuana and Employment Go Together?

If you’re an employer with questions regarding employee marijuana use, you’re not alone.  State and local governments are increasingly paving the way for cannabis use at what is generally viewed as a rapid pace. In addition to states where legislatures are acting independently to pass cannabis-related laws, in every election cycle, more marijuana-related issues find their way onto state ballots and more candidates run on platforms that expressly include marijuana reform. After every election cycle it becomes increasingly clear that marijuana is, with some exception, a “winning issue.”  In fact, the majority of states now have some form of either medical or recreational marijuana laws on the books. For instance, Minnesota has legalized medical marijuana use. The laws governing medical marijuana use prohibit termination of and discrimination against an employee who tests positive for cannabis on a drug test if the employee is a patient enrolled in Minnesota’s cannabis registry program, unless the employee was impaired by the marijuana during employment. Cannabis remains a Schedule I illegal drug under federal law despite legalization efforts here in Minnesota and elsewhere. Because of this, many crucial questions concerning marijuana use remain unanswered, including in the area of workplace accommodations. The answers to these questions depend largely on how state legislatures, including here in Minnesota, have drafted laws regarding marijuana use.  But not all questions have answers, and some parties are looking to the courts. There are several key cases currently working their way through federal and state courts that may ultimately affect employee rights when it comes to marijuana use, including issues related to employee accommodations in the workplace. One such case, Terry v. United Parcel Services, Inc., asks a federal court in Arizona to consider whether an employer who terminates an employee based on a positive drug test has violated of the Americans with Disabilities Act (“ADA”) where that employee is a registered cardholder of a state-sponsored medical marijuana program and is not impaired while at work.  Under current federal law, the plaintiff in Terry has a tough case to win. While the ADA prohibits discrimination against individuals with recognized disabilities, the ADA does not consider an employee who engages in the illegal use of drugs a qualified individual with a disability. Because marijuana remains illegal under federal law despite its standing under any state law, the court is unlikely to find a violation of the ADA.  However, that doesn’t mean that parties will not continue to push cases like this because, regardless of the eventual ruling in Terry, the intersection between medical marijuana and the ADA is a natural one and is sure to garner increasing attention.  After all, many individuals who are approved for medical marijuana use often suffer from one or more disabilities or conditions recognized under the ADA. The Terry case serves as a great example of the kind of marijuana-related litigation that will have the potential to greatly affect employer practices nationwide. Over the next several years, expect to see increased attention on these types of issues as we further transition into a country that more fully legalizes cannabis use.