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CURRENT HPSS LAW NEWS

 

12-18-2024 HPSS NEWS ANNOUNCEMENT

HPSS Law Opens Lehigh Valley, Pennsylvania Office

Hendrick, Phillips, Salzman & Siegel, P.C. is pleased to announce the opening of its Lehigh Valley office located in Allentown, Pennsylvania. HPSS Law is excited to join the thriving community of construction professionals in the Lehigh Valley and is looking forward to contributing to the continuing growth and success of the industry in the region.     

HPSS Law’s Lehigh Valley office is being led by J.T. Gallagher, a partner and shareholder in the firm. J.T. got his start in construction in high school working as a plumber’s helper for an Allentown-based mechanical contractor and has been working in various roles in the industry ever since.  After practicing out of the firm’s Atlanta, Georgia office for several years, J.T., his wife, Stephanie, and their three boys moved back to J.T’s hometown, Macungie, Pennsylvania. J.T. believes that the Lehigh Valley is the ideal place to raise a family, build community, and thrive in new ventures. J.T. is excited to bring HPSS Law’s wealth of construction industry experience, knowledge, and expertise to contribute to the success of the flourishing construction industry in Eastern Pennsylvania.     

HPSS Law’s Lehigh Valley office is located at 6081 Hamilton Blvd, Suite 600, Allentown, PA 18106. For more information about HPSS Law or to inquire about legal services in Eastern Pennsylvania, please visit HPSS Law’s website at www.hpsslaw.com, email J.T. Gallagher at jtg@hpsslaw.com, or call our Lehigh Valley office at 610-484-4459.

Corporate Transparency Act Filings Enjoined

You will recall our update in January on the filing requirements under the Corporate Transparency Act, which were implemented effective January 1, 2024. As we discussed then, the Corporate Transparency Act aims to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s financial markets. Under the legislation, businesses that meet certain criteria are required to submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), providing details identifying individuals who are associated with the reporting company. 

 For companies in existence prior to January 1, 2024, these filings were required before January 1, 2025. For companies formed in the year 2024, the filings were due within 90 days after formation. For 2025 and beyond, new companies were required to file within 30 days after formation.

 On December 3, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction against these filing requirements and ruled the statute unconstitutional. The court imposed its injunction on a nationwide basis. For now, therefore, these filings are not required. FinCEN has issued guidance recognizing the effect of the court’s order and acknowledging that BOI reports are not required while the court’s ruling is in effect and that anyone who fails to make a required filing is not subject to liability during that time.

 Of course, this may not be the final resolution. The government has already appealed the ruling to the 5th Circuit and will likely seek the lifting of the injunction pending resolution of the underlying case. The appeals court may decide to act quickly, especially given the short time left before the initial deadline, or it may allow the injunction to remain in place until the case is decided.

 Be aware, if you are inclined to make sure that you are in full compliance, that FinCEN has provided that reporting companies may continue to make voluntary filings. In that case, if the statute is upheld and the filing requirements are reinstated, companies making those voluntary filings will be in compliance without further action.

 This entire situation remains in flux. Earlier litigation remains ongoing, and several appeals are currently pending. We will continue to monitor and provide updates as new information becomes available.  If you have further questions about how the Corporate Transparency Act may affect your business, please contact Scott Calhoun at sdc@hpsslaw.com.

Stop the Presses! New Salary Level Test Declared Invalid

In our e-blast published on June 14, we informed you of the Department of Labor’s final rule concerning the new salary level test for classifying certain employee as exempt from overtime pay under the Fair Labor Standards Act. The rule became effective on July 1, and it raised the salary level required for what are commonly known as the white collar exemptions from $684 per week to $844 per week, beginning on July 1. Further, the rule raised the salary level to $1,128 per week, beginning January 1, 2025. The rule also increased the annual salary threshold for the highly compensated employee exemption. The salary level for the highly compensated employee was raised to $132,964 effective on July 1, and the rule raised it again to $151,164 effective January 1, 2025. Importantly, however, on November 15, the U.S. District Court for the Eastern District of Texas issued a ruling invalidating and vacating the final rule. The ruling applies to all employers throughout the country.

The court’s ruling was based on its conclusion that the DOL had exceeded its authority by effectively setting salary minimums at levels that effectively displaced the duties test component of whether a worker qualifies for an exemption.

Many companies were required to, and did, provide raises to employees on July 1, in order to keep those employees exempt from overtime pay. Those companies may now choose to roll back those salary levels, although consideration should be given to company morale before proceeding that route. Certainly, however, employers are no longer obligated to provide another raise on January 1, in order to keep the exemption.

With the change to the Trump administration coming next month, it is not anticipated that the DOL will appeal the court’s decision. We will certainly keep you informed.

Comment Period Extended for OSHA’s Proposed Heat Injury and Illness Prevention Standard

On November 29, OSHA announced that it was extending the period for submitting comments on its proposed Heath Injury and Illness Prevention Standard in Outdoor and Indoor Work Settings by 15 days. Comments may now be submitted via this link through January 14, 2025. 

On the same date, OSHA also announced that it will hold a public hearing on the proposed rule. The public hearing is scheduled to begin on June 16, 2025. The hearing will be held virtually, and it will begin at 9:30 A.M. Additional information on how to access the hearing will be provided viathis link. To testify or question other witnesses at the hearing, interested periods must electronically submit a Notice of Intention to Appear on or before May 2, 2025. In addition, those who request more than 10 minutes for their presentation at the haring and those who intend to submit documentary evidence at the hearing must submit the full text of their testimony, as well as a copy of any documentary evidence no later than May 23, 2025.

It remains to be seen whether OSHA’s proposed rule will survive under the Trump administration. We will continue to provide our readers updates on the proposed rule, as it works its way through the process. In the meantime, if you have any questions regarding the proposed rule, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.

Dramatic Increase Expected in Immigration Enforcement: Conduct Internal Form I-9 Audits with Our Expertise

The U.S. Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) place a strong emphasis on employer compliance with employment eligibility verification regulations, and this emphasis is likely to increase significantly in the upcoming Trump administration. Most employers are expecting a dramatic increase in worksite enforcement, including potential surprise raids of companies suspected of hiring undocumented workers – particularly in the construction industry. This expectation is based on comments by Trump “border czar” pick, Tom Homan. In the first Trump administration, I-9 audits surged four-fold from the 2017-2018 fiscal year, ultimately reaching 6,450 audits in 2019. Penalties range up to $2,789 for paperwork violations and up to $27,894 per unauthorized immigrant worker who was knowingly employed. With increasing audits and penalties, the stakes for non-compliance have never been higher. Conducting internal Form I-9 audits is a proactive strategy that minimizes the risk of costly fines and reputational harm.

What Is Form I-9 and Why It Matters
Form I-9, Employment Eligibility Verification, is a mandatory document that every employer in the U.S. must complete for all new employees. This form verifies an employee’s identity and their legal authorization to work in the United States. Errors or omissions, even if unintentional, can result in substantial penalties. In fiscal year 2023 alone, ICE issued millions of dollars in fines, emphasizing the necessity of maintaining accurate and compliant records.

Benefits of an Internal Form I-9 Audit
An internal audit allows you to identify and rectify common mistakes such as missing signatures, incorrect dates, or incomplete information before a government audit occurs. Further, by addressing errors proactively, you can significantly reduce the risk of fines and penalties during an ICE audit.

How We Can Help
Our team specializes in assisting businesses with internal Form I-9 audits, leveraging our expertise to ensure compliance and mitigate risks. We can support you by meticulously reviewing your existing Form I-9s for accuracy and compliance. Further, we can provide targeted training for your HR team to address specific compliance gaps. Finally, we can advise on best practices that help you navigate the complexities of virtual document verification and E-Verify requirements. Proactive compliance is the key to avoiding the pitfalls of non-compliance. Contact us today to schedule a consultation and learn how we can assist you in conducting a thorough and effective Form I-9 audit.

For more information, please reach out to Philip Siegel at pjs@hpsslaw.com(404-469-9197) or Mark Husted at mah@hpsslaw.com (256-453-7506).

OSHA Finalizes Rule on Proper Fit Requirements for Personal Protective Equipment

On December 11, 2024, OSHA finalized a revision to the personal protective equipment (“PPE”) standard for construction, improving protections from hazardous conditions. The rule adds specific language requiring employers to provide PPE that properly fits construction industry workers. PPE includes various types of protective equipment, such as hard hats, gloves, goggles, safety shoes, welding helmets and goggles, hearing protection devices, respirators, coveralls, vests, harnesses, and full body suits.

A properly sized PPE aims to protect construction industry workers from exposure to hazards that can cause severe injuries and illnesses at a jobsite. Such injuries and illnesses may result from contact with chemical, radiological, physical, electrical, mechanical, or other hazards. Moreover, improperly sized PPE can create new hazards for workers as well as discourage use of PPE due to discomfort or ill fit. This revision comes from a longstanding industry safety concern, particularly among some women and physically smaller or larger workers.

This rule goes into effect on January 13, 2025. If you have any further questions, contact Elina Gutsaeva. You can e-mail Elina by clicking here, or you can reach her directly at 404-469-9183.

New DOL Severe Injury Report Dashboard: What Employers Need to Know

On September 4, 2024, the U.S. Department of Labor (DOL) launched its online Severe Injury Report dashboard, providing public access to data on workplace injuries. This tool allows the public to search the DOL’s Severe Injury Report database for workplace injuries from 2015 to 2023. The dashboard allows users to break down injury data by various categories, including the name of your company. That is, the public can search the database for your company’s history of workplace injuries. This, of course, raises a number of concerns.

Key Concerns for Employers

Limited Context for Injury Data:

The data in the dashboard provides information on severe injuries, but it does not include context about the circumstances surrounding each incident, such as the cause of the injury, whether safety protocols were followed, or if the injury resulted from an employee’s own negligence or failure to comply with safety procedures. This lack of detail could lead to misinterpretations or misleading conclusions about an employer’s workplace safety practices. Some factors that may influence the data but are not reflected in the injury data: 

  • The size of the company - larger companies may report more injuries by virtue of having more employees;

  • The nature of the work - certain industries are inherently more dangerous than others;

  • Geographic or environmental factors - workplace injuries in hot climates, for example, could be wrongly generalized as an employer’s failure to manage environmental risks.

Short Timeframe of Data

The dashboard only covers injury data from 2015 to 2023, which may not provide a full picture of an employer’s safety history. The short period could lead to skewed perceptions, for example, if an employer’s recent changes to its safety programs or workplace conditions are not adequately reflected. 

Risk of Increased Litigation and Governmental Oversight 

As more key players—such as plaintiffs, insurance carriers, and regulatory bodies—gain access to this data, employers could face heightened exposure to legal challenges, insurance claims, or enforcement actions based on perceived safety deficiencies.  

Misrepresentation of Gaps in the Data

The absence of data from states with their own workplace safety programs could be used to create a misleading narrative. Litigants might argue that employers in certain states are particularly unsafe or that the federal data reflects a more widespread issue than it actually does, as the data may not fully account for regional differences or state-specific safety regulations.

In light of these concerns, it remains to be seen whether the Dashboard survives the forthcoming transition to the Trump administration. Look to our future e-blasts for any updates.

Superior Court of Pennsylvania confirms that lien rights do not extend to suppliers of rental equipment under the Pennsylvania Mechanics’ Lien Law 

In its decision in the matter of Cleveland Brothers Equipment Company, Inc. v. Arcadia North Land, LLC, issued on November 4, 2024, the Superior Court of Pennsylvania confirmed that a rental equipment supplier who had not been paid for leased equipment that was used during construction but not “incorporated into the improvement” had no lien rights under the Pennsylvania Mechanics’ Lien Law.   The Court’s decision relied upon and effectively re-affirmed its October 19, 2023, decision in R.A. Greig Equipment Company v. Mark Erie Hospitality, LLC. In Grieg, the Superior Court, recognizing a lack case law on the topic and citing as its support a 1923 Pennsylvania Supreme Court case, held that the Mechanics Lien Law required construction equipment to be “‘incorporated into the improvement,’ i.e., actually used in the building structure” for it to serve as the basis for a lien. Notably, the Mechanics Lien Law itself defines “materials” as “building materials and supplies of all kinds, and also includes fixtures, machinery and equipment reasonably necessary to and incorporated into the improvement.”  (emphasis supplied) 49 P.S. § 1201(7). In both Cleveland Brothers and Grieg, the Superior Court found that rental equipment used during construction (an excavator in Cleveland Brothers and telehandler in Grieg) could not serve as the basis of a lien because the equipment was not “incorporated into the improvement.” The Grieg decision, as confirmed by Cleveland Brothers decision, has made it clear that, in Pennsylvania, mechanics lien rights do not extend to suppliers of rental equipment that is utilized on construction projects. 

If you have questions about this article or need guidance in relation to the Pennsylvania Mechanics’ Lien Law, please contact J.T. Gallagher at jtg@hpsslaw.com or call the firm’s Pennsylvania office at 610-484-4459.

Firm News

Hendrick Phillips Salzman & Siegel received Tier 1 recognition in the 2025 edition of the Best Law Firms® Awards. This award is bestowed to an entire legal practice at a firm by specialty and jurisdiction. These awards analyze six research initiatives collating feedback from clients, lawyers, firm leaders, and marketing teams. Our Tier 1 recognition in construction law and construction litigation for Metropolitan Atlanta is reserved for the highest scoring firms during the Best Lawyers annual review process!

We are also excited to announce that Mariya Davis recently joined our Firm. Prior to joining HPSS, Mariya was an Associate Attorney at a boutique construction law firm. Mariya also held esteemed positions of serving as a Judicial Law Clerk for both the United States District Court for the Northern District of Georgia as well as the Metro Atlanta Business Court. During law school, Mariya fine-tuned her arbitration and advocacy skills while devoting several years to Willem C. Vis International Commercial Arbitration Moot, which supports the study of international commercial law with targeted training to resolve business disputes. While in law school, Mariya was also Legal Intern for the Honorable Justice Keith R. Blackwell at the Supreme Court of Georgia, and. the Honorable Judge John J. Goger at the Superior Court of Fulton County.

Mariya earned her law degree at Georgia State University College of Law, with accolades as GSU Law Review, Associate Legislation Editor. She earned her undergraduate degree from Oglethorpe University.

 

08-27-2024 HPSS NEWS EBLAST

Check out the headlines in our recent eblast and click below for full details on all legal matters associated with highly relevant current news and associated impacts in the construction industry.

06-11-2024 HPSS NEWS EBLAST

Check out the headlines in our recent eblast and click below for full details on all legal matters associated with highly relevant current news and associated impacts in the construction industry.

01-10-2024 HPSS EBLAST

Firm News! Hendrick Phillips Salzman & Siegel, PC is proud to announce C. Leanne Prybylski as the firm's newest partner. Leanne has been a valuable member of the HPSS team since September, 2019, and will play a key role in HPSS's future. Congratulations, Leanne!

10-31-2023 HPSS EBLAST

Department of Labor Proposes Changes to Salary Level Test

Under the Fair Labor Standards Act, only non-exempt employees are entitled to overtime pay during those workweeks in which they work more than 40 hours. In order to avoid paying overtime pay to employees, the employees must fit within one of the law’s exemptions from overtime pay. The exemptions most often used in the construction industry are commonly referred to as the “white collar” exemptions. Those exemptions include the executive exemption, the administrative exemption, the professional exemption, and the highly compensated employee exemption.

In order to fit an employee within one of the “white collar” exemptions, the employer must past the salary basis test, the salary level test, and a job duties test. Currently, the salary level test under the executive, administrative, and professional exemptions is met when the employee is paid a salary of at least $684 per week ($35,568 per year). The current salary level test under the highly compensated employee exemption is $107,432. Importantly, on August 30, the Department of Labor released its Notice of Proposed Rulemaking, which seeks to increase the minimum salary threshold to $1,059 per week ($55,068 per year) for the executive, administrative, and professional exemptions. The Department of Labor proposes changing the minimum salary level for the highly compensated employee exemption to $143,988.

Notably, the proposed rule from the Department of Labor also includes automatic updates to the earnings thresholds every three years. The weekly standard salary level for the executive, administrative, and professional exemptions would be aligned to the 35th percentile of full-time salaried workers in the lowest-wage census region, and the highly compensated employee total annual compensation requirement would be aligned to remain at the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally.

Interested parties have until November 7 to submit comments in response to the proposed rule. If you have any questions about proper classification of exempt and non-exemption workers or how to properly computer overtime due your non-exempt employees, please contact Scott Calhoun or Philip Siegel. You can e-mail Scott by clicking here, and you can e-mail Philip by clicking here.

New Rule Takes Effect: Prevailing Wages and the Davis-Bacon and Related Acts

 On October 23, 2023, the U.S. Department of Labor’s (“DOL”) new rule went into effect, updating the regulations issued under the Davis-Bacon and Related Acts (“DBRA”). The DBRA governs wage payment for contractors and subcontractors working on federal and federal assisted construction projects. It does this primarily through setting the “prevailing wages” that contractors must pay workers on federal projects.

The new rule changes the way DOL calculates and sets prevailing wages. Previously, it set the applicable prevailing wages at either the majority rate or the weighted average rate if no majority rate existed. Now, it will use the “30-percent rule” previously in effect from 1935 to 1983 to set prevailing wages. This means that in the absence of a wage rate paid to a majority of workers in a particular classification, a wage rate will be considered prevailing if it is paid to at least 30-percent of such workers. If no rate is paid to at least 30-percent, then it utilizes a weighted average rate.

Importantly, current wage determinations still apply for the life of ongoing contracts. However, the new rule will now apply if a contract is modified or an option exercised to include additional substantial construction, alteration, and/or repair work not within the scope of work of the original contract or order, or if such requires the contractor to perform work for an additional time period not originally obligated. Overall, the most likely impact of the new prevailing wage rule will be an increase in labor rates for some contractors on future federal projects.

While the prevailing wage calculation is the most significant change, the total rule contains many other regulatory changes as well. It exceeds 800 pages in total length. DOL’s website contains a number of helpful resources for navigating the new rule, including: a chart comparing the new rule with the old, a FAQ page, a small entity compliance guide, a video guide, a webinar, and an overview memorandum.

If you have any questions regarding the new DBRA rule or related employment questions, please call or email either Philip Siegel or Jason Kamp. Philip’s email is pjs@hpsslaw.com and he can be reached directly at (404) 469-9197. Jason’s email is jak@hpsslaw.com and he can be reached directly at (404) 469-9193.

EEOC Issues Proposed Workplace Harassment Guidance

On October 2, the EEOC published its notice of “Proposed Enforcement Guidance on Harassment in the Workplace.” Although the guidance is not final (the public comment period lasts through November 1), much of the substance of the guidance is expected to be finalized, setting forth standards to which the EEOC will hold employers accountable. The entire proposed guidance can be found here.

One significant focus of the lengthy proposed guidance is providing broad protections for LGBTQ+ workers. EEOC is taking the position that harassment based on sexual orientation and gender, including how identity is expressed, constitutes sex-based discrimination. Examples of such harassment as detailed in the guidance include: epithets regarding sexual orientation or gender identity; intentional and repeated misgendering (using pronouns inconsistent with the person’s gender identity); and denial of access to bathrooms or other sex-segregated facilities consistent with the person’s gender identity.

Under the draft guidance, employers are also required to address workplace effects of an employee’s social media activity. EEOC notes that even though conduct does not occur in a work-related context, it can affect the terms and conditions of employment. Such conduct includes phone, computers and social media accounts. Sexist, racist or other discriminatory speech in this context could be considered harassment. Some commentators have already noted that the new guidance could create conflicts with recent decisions from the NLRB with respect to not restricting employee speech, including social media speech outside work.

The new guidance also addresses potential harassment in the context of pregnancy and related medical conditions and personal decisions (including lactation, contraceptive choices, and abortion). Employers will be required to provide protection for their employees on these matters. And although employers are required to accommodate employees’ sincerely held religious beliefs, employers also need to protect employees against religiously motivated harassment, and so are not required to accommodate religious expression that creates “or reasonably threatens to create a hostile work environment." 

We encourage all employers to review the proposed guidance and participate in the comment process if possible. Communicating with trade associations who may submit comments on the part of industry members may be the most efficient way to participate. In any event, when the guidance is finalized, employers should review their employment policies to ensure that appropriate policies are in place to address workplace harassment issues. The new guidance does contain resources to assist in this process. 

Further Questions? If you have any other questions about this article, please contact Philip Siegel or Scott Calhoun. You can e-mail Philip by clicking here, and you can e-mail Scott by clicking here. 

OSHA Update

In our last e-blast, we informed that you OSHA was committed to publishing a workplace rule to address heat-related illnesses. OSHA has since completed the process of gathering input from diverse stakeholders and experts, including finishing its Small Business Regulatory Enforcement Fairness Act panel reviews. Now, OSHA has re-opened the comment period for interested stakeholders to submit comments before a proposed standard is published. Comments may be submitted through this link through December 23. While we wait for a rule to be published, contractors are reminded to provide sufficient training and to develop and implement a written Heat Illness Prevention Plan, in accordance with OSHA’s published guidance. If you need assistance preparing a Heat Illness Prevention Plan consistent with OSHA’s published guidance, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.

OSHA is also seeking public input on its proposed rule, published on August 30, which would allow employees to choose third party representatives to accompany an OSHA inspector into nonunion facilities. Under the proposed rule, employees can request that a third party, non-employee representative participate in an OSHA inspection on the basis that they have "relevant knowledge, skills, or experience" that may be reasonably necessary to conduct an effective and thorough physical inspection of the workplace. Comments on the proposed rule can be submitted through this link through November 13, 2023.

Firm News

  • Philip Siegel, Stephen Phillips, and Martin Salzman were selected by their peers for inclusion in the 30th edition of The Best Lawyers in America for their expertise in construction law.

  • On September 27, Philip Siegel presented a webinar to the Virginia Roofing Professionals Association. In the webinar, Philip discussed medical marijuana in the workplace.

  • Philip also spoke in Houston, Texas at the annual conference of the Roofing Contractors Association of Texas on October 5. Philip spoke about the essential policies for any employee handbook.

  • Philip, Stephen Phillips, and Leanne Prybylski were all presenters at this year’s LegalCon in Chicago for the National Roofing Contractors Association.

  • J.T. Gallagher presented a session at the National Electrical Contractors Association's annual conference in Philadelphia titled "Dealing with Delay and Impact: From Contract Negotiations to Claims".

  • Ben Lowenthal's article titled "Protecting the Right to Payment" was published in The Contractor's Compass, the monthly educational journal of the American Subcontractors Association.

08-03-2023 HPSS EBLAST

New Form I-9 Published by USCIS 

On August 1, 2023, the U.S. Citizenship and Immigration Services (“USCIS”) published a revised version of the Form I-9 Employment Eligibility Verification. According to the USCIS, the new Form I-9 is designed to be more user friendly. Some of the improvements include shortening the Form I-9 to a single page, ensuring the Form I-9 can be filled out on tablets or mobile devices, and improving the guidance to the Lists of Acceptable Documents. Employers may now start using the new Form I-9 but may continue to use the old version through October 31, 2023. Importantly, employers will be required to only use the new Form I-9 starting on November 1, 2023. The new Form I-9 is available here. Instructions for completing the Form I-9 may be found here.

Also on August 1, 2023, the U.S. Department of Homeland Security (“DHS”) established and began implementing an optional remote procedure to allow employers meeting certain requirements to be able to remotely examine their employees’ identity and employment authorization documents, instead of the current in-person requirement, for the first time.

Form I-9 regulations require employers to physically examine employee identification and employment verification documentation within three days of employment to make sure that the documents appear genuine and relate to the employee presenting them. To be eligible for the optional alternative remote employment verification procedure, employers must be enrolled in E-Verify and remain in good standing and compliance with all requirements of the E-Verify program.

Instructions for the optional alternative remote employment verification procedure, and participation requirements, may be found here. Additional information on the new Form I-9 and E-Verify enrollment may be found here.  

If you have any questions regarding the new Form I-9 or employee verification requirements, please do not hesitate to call or email either Philip Siegel or Ben Lowenthal. Now may also be a good time for your company to conduct an audit of its current Form I-9s. You can e-mail Philip by clicking here, and you can e-mail Ben by clicking here. You can reach Philip directly at (404) 469-9197, and Ben directly at (404) 469-9177.

07-11-2023 HPSS EBLAST

NLRB Reverses Course Again on Independent Contractor Test 

In 2019, the NLRB issued its decision in the SuperShuttle DFW, Inc. case, emphasizing the importance of entrepreneurial opportunity in applying the traditional multi-factor test for determining whether workers should be classified as employees or independent contractors, reversing existing precedent which had favored classification as employees, and therefore unionization. On June 13 of this year, the NLRB once again reversed course, demonstrating a clear preference of the current administration toward potential unionization. 

In Atlanta Opera, the NLRB held that the traditional multi-factor test must be applied, and that entrepreneurship was no longer to be viewed as an “animating principle”.  Rather, the Board will evaluate whether workers are properly classified as independent contractors in light of all of the traditional common law principles, with no one factor being decisive. Based on the consideration of all the factors in this case, the Board determined that the stylists were employees and not independent contractors and therefore had the right to unionize.

This decision continues the pattern of NLRB decisions adhering to political preferences of the particular administration in power. Note, however, that NLRB decisions are subject to appeal and the D.C. Circuit, which has jurisdiction over NLRB decisions, has previously ruled against the standard applied in this case on more than one occasion, as it favors the emphasis on entrepreneurial opportunity used in the SuperShuttle case. Note also that the dissent in the Atlanta Opera case argued that there was no need to overturn the SuperShuttle standard, because the facts were such that the Atlanta Opera workers would be found to be employees even under that standard. 

We expect litigation on these issues to continue. In the meantime, employers need to be aware of the standards that are now being applied, especially in light of the emphasis being demonstrated by the Board and its general counsel. Attention should be paid to whether workers are properly classified as independent contractors, and adjustments should be made where necessary. As we noted in our update in 2019 when the SuperShuttle case was announced, these decisions do not necessarily impact DOL and income tax issues related to worker classification, but the Atlanta Opera decision does indicate the emphasis of the administration in general, which is clearly in favor of union employees and against employers’ business interests. If you have any questions about the misclassification issue, please contact Scott Calhoun or Philip Siegel. You can e-mail Scott by clicking here, and you can e-mail Philip by clicking here.

DOL Publishes New FLSA, FMLA, and EEOC Posters 

It’s time to get some new posters. The U.S. Department of Labor (“DOL”) has updated workplace posters regarding the Fair Labor Standards Act (“FLSA”), the Family Medical Leave Act (“FMLA”), and the Equal Employment Opportunity Commission’s (“EEOC”) “Know Your Rights: Workplace Discrimination is Illegal” poster.

The new FLSA poster was updated to reflect employers’ obligations under the Providing Urgent Maternal Protection for Nursing Mothers (“PUMP”) Act which took effect in December 2022. Under the PUMP Act, covered employers are required to provide nursing employees with a reasonable break time and place (other than a bathroom) to express milk free from intrusion and shielded from view. The new FMLA poster has been redesigned and has new language about “covered employers,” namely a private employer that had at least 50 employees during at least 20 workweeks in the current or previous calendar year.

The new EEOC “Know Your Rights: Workplace Discrimination is Illegal” poster was just updated on June 27, 2023 when the Pregnant Workers Fairness Act went into effect. Under the new Pregnant Workers Fairness Act, covered employers (private employers with at least 15 employees) are required to provide reasonable accommodations to an employee’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodations will cause an undue hardship.

These posters are available on the DOL websites or updated “all-in-one” posters can be purchased from third-party vendors. If you have any questions regarding these new posters, please do not hesitate to call or email either Philip Siegel or Ben Lowenthal. You can e-mail Philip by clicking here, or e-mail Ben by clicking here.

The U.S. Supreme Court Changes Raises the Standard For Denying a Religious Accommodation Request

In a unanimous decision, the U.S. Supreme Court announced a higher standard for employers to measure the burden a worker’s religious accommodation imposes on its business. In the case Groff v. DeJoy, the Court revisited the standard to be used by employers in those instances where an employee seeks a religious accommodation. 

Consider the laborer who requests not to be assigned work on the weekends for religious reasons. Employers faced with a request for this religious accommodation need to consider whether accommodating the request would impose an “undue burden” on the company. The term “undue burden” may be familiar to employers who have had to address requests for accommodations under the Americans with Disabilities Act (“ADA”). 

Employers faced with a request for an accommodation under the ADA could deny the request if the request would impose an “undue burden” on the company. In the ADA context, “undue burden” was defined as “significant difficulty or expense”. To the contrary, until the Groff case, employers could deny a request for a religious accommodation if the request would cause the company “more than a de minimis cost”, a much lower burden. The Groff case changes that standard in the context of requests for religious accommodations.

In the Groff case, Gerald Groff objected to delivering packages for Amazon on Sundays and requested an accommodation allowing him to avoid working that day on religious grounds. The employer denied his request, and Gross consequently quit his job and brought a claim under Title VII alleging he was wrongfully denied his request for a religious accommodation. The Supreme Court ruled in favor of Groff. Significantly, the Court held that an employer may only deny a religious accommodation request if the burden of granting the request would result in “substantial increased costs in the conduct of its business.”

Employers will need to take into account all relevant facts when determining whether a request for a religious accommodation will result in substantial increased costs. Certainly, the nature of the business, the size of the business, and the operating costs of the business will be relevant factors in the analysis. But the days of having to show only that such a request would result in more than “de minimis” costs to deny the request are now behind us, and employers need to be mindful of the new standard to avoid religious discrimination claims.

If you have any questions about how to respond to a request for religious accommodation and whether that request would result in “substantial increased costs” in the conduct of your business, contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.

What’s Happening with OSHA?

The answer: a whole lot. 

On May 1, OSHA began a National Emphasis Program focused on reducing fall-related injuries and fatalities. This is of particular importance to roofing contractors. Under the Program, OSHA compliance officers are authorized to stop and conduct an inspection anytime they see someone working from heights. There is no requirement that the OSHA compliant officer first observe a violation or imminent danger. Of course, this means roofing contractors can expect an increase in OSHA inspections. Be sure your supervisory employees in the field know how to respond if an OSHA compliance officer arrives on site.

OSHA is also moving forward with its final rule on its electronic tracking of workplace injuries and illnesses. OSHA provided its final rule to the Office of Information and Regulatory Affairs, which is the next step in the process to publishing a final rule. The final rule proposed by OSHA is anticipated to require establishments with 100 or more employees in certain designated industries, including construction, to annually electronically submit information from their OSHA 300, 301, and 300A. 

OSHA also remains committed to publishing a workplace rule to address heat-related illnesses. OSHA is in the process of gathering input from diverse stakeholders and experts. On May 31, the National Advisory Committee on Occupational Safety and Health (“NACOSH”) discussed a report from its Heat Work Group on proposed recommendations regarding potential elements of a rule.  NACOSH accepted a motion to forward those recommendations to OSHA, along with a sample exposure control plan/heat illness prevention plan. OSHA also recently initiated a Small Business Regulatory Enforcement Fairness Act panel review, the next step before a proposed standard is published. While we wait for a rule to be published, contractors are reminded to provide sufficient training and to develop and implement a written Heat Illness Prevention Plan, in accordance with OSHA’s published guidance. If you need assistance preparing a Heat Illness Prevention Plan consistent with OSHA’s published guidance, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.

Construction contractors of all trades are also reminded to best prepare themselves for defending an OSHA citation by identifying all hazards its employees are exposed to and addressing those hazards in accordance with OSHA guidelines. Contractors should be focused on those elements of a safety program that support the unforeseeable employee misconduct defense: (1) having a work rule on all applicable hazards; (2) providing training on all hazards its employees are exposed to; (3) inspecting job site to ensure its employees are complying with safety rules; and (4) administering swift and effective discipline when violations are discovered. 

National Labor Relations Board Decision and General Counsel Guidance on Severance Agreements

On February 21, 2023, in the case of McLaren Macomb, the National Labor Relations Board (“NLRB”) ruled that the broad confidentiality and non-disparagement provisions in the severance agreements at issue violated the employees’ right to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. In the decision, the NLRB found that confidentiality and non-disparagement requirements in the severance agreement were unlawful because employees could interpret the provisions as prohibiting them from discussing their workplace experiences, which the NLRB viewed as central to the exercise of employee rights under the National Labor Relations Act (the “Act”). 

Thereafter, on March 22, 2023, the NLRB’s general counsel, Jennifer Abruzzo, issued a memorandum that provided guidance on questions that employers had presented since the issuance of the McLaren Macomb decision. While the memorandum states that entering into severance agreements with employees is not prohibited, the decision and the guidance from the NLRB’s general counsel will require employers to re-examine their severance agreements as previous forms may now be considered unlawful and, in the NLRB’s general counsel’s opinion, the NLRB may apply the McLaren Macomb decision retroactively. Further, employers may need to re-examine confidentiality and non-disparagement provisions in employee handbooks, policies, and employment agreements to determine whether the McLaren Macomb decision makes such provisions unlawful or if such provisions are at risk of being deemed unlawful if the NLRB rules in future cases in the manner that is consistent with the NLRB’s general counsel’s guidance memorandum. NLRB General Counsel memorandum GC-2023-05 can be found here.

What is a “Salary” Exempting an Employee from Overtime under the Fair Labor Standards Act

This term, the Supreme Court of the United States, in Helix Energy Solutions Group Inc. et al., found that an executive earning approximately $200,000.00 per year was not exempt from overtime because he was paid a daily rate rather than on a “salary basis.” The Supreme Court found that a day rate under the Department of Labor’s (DOL) regulations did not constitute a “salary,” which the Supreme Court defined as “a steady stream of pay, which the employer cannot much vary and the employee may thus rely on week after week.” This begs the question, “What is a ‘salary’ under the DOL’s regulations for purposes of the Fair Labor Standards Act overtime exemption?” 

The DOL provides guidance to answer this question in Fact Sheet #17G which can be found here. The DOL’s fact sheet provides that to qualify for the exemption, an employee generally must be paid not less than $684 per week. The fact sheet further provides that “[b]eing paid on a ‘salary basis’ means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis.” And, “[t[he predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.” Additionally, an exempt employee must receive the full salary for any week in which the employee performs work but does not need to be paid for any work week in which they perform no work. The DOL’s fact sheet also states that, “If the employer makes deductions from an employee’s predetermined salary, i.e., because of the operating requirements of the business, that employee is not paid on a “salary basis.” And, “[i]f the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” Although the above outlines the basic requirements, other exceptions and intricacies can apply and must be considered.   

Notably, to qualify as an employee exempt from overtime, the employee must not only be paid on a “salary basis” of not less than $684 per week, the employee must also qualify under an applicable “job duties” test. The DOL provides guidance on the “job duties” test in Fact Sheet #17A which can be found here.

Firm News

We are very proud to announce that Hendrick, Phillips, Salzman & Siegel has been recognized as one of the Top 50 Construction Law Firms by Constructive Executive Magazine. for 2023. The magazine developed The Top 50 Construction Law Firms™ ranking by asking more than 600 U.S. construction law firms to complete a survey. The data collected included: 1) 2022 revenues from the firm’s construction practice; 2) number of attorneys in the firm’s construction practice; 3) percentage of firm’s total revenues derived from its construction practice; 4) number of states in which the firm is licensed to practice; 5) year in which the construction practice was established; and 6) number of construction industry clients served during fiscal year 2022. e ranking was determined by an algorithm that weightedthe aforementioned factors in descending order of importance.

We are also excited to announce that Jason Kamp recently joined the Firm. Jason is an experienced and skilled attorney specializing in providing legal counsel and representation to clients in the construction industry. With a deep understanding of construction law and extensive industry knowledge, Jason has successfully handled numerous complex construction-related cases and transactions. Over the years, Jason has represented clients from various sectors, including developers, contractors, subcontractors, architects, and engineers.

Lastly, Philip Siegel began his three year term as chapter counsel to the Associated Builders and Contractors of Georgia.

04-13-2023 HPSS EBLAST

OSHA Announces New Enforcement Standards

The Occupational Safety and Health Administration has announced new enforcement standards and guidance, which became effective March 27, 2023. The new standards are intended to increase penalties in the hopes of ultimately deterring employers from committing serious violations of OSHA rules. 

The new guidance addresses two separate OSHA enforcement issues. First, regional administrators and area office directors will have broader discretion to issue citations for certain violations on an “instance-by-instance” basis. Since 1990, instance-by-instance citations have been limited to willful violations. Under the new enforcement standard, instance-by-instance citations may be applied to certain “high-gravity” violations, specific to falls, trenching, machine guarding, respiratory protection, permit required confined space, lookout tagout, and other-than-serious violations specific to record-keeping.

The construction industry is specifically identified as a target for the new approach to instance-by-instance citations. These citations will now normally be based on one of more of the following factors:

  • The employer has received a willful, repeat, or failure to abate violation within the past 5 years where that classification is current

  • The employer has failed to report a fatality, hospitalization, amputation, or loss of an eye

  • The proposed violations are related to a fatality/catastrophe

  • The proposed record-keeping citations are related to injury or illness that occurred as a result of a serious hazard

Separate penalties will be assessed for each violation issued on an instance-by-instance basis.

The second piece of enforcement guidance consists of a reminder to regional administrators and area directors not to group violations, but rather to cite them separately “where there is evidence that worksite conditions giving rise to the violations are separate and distinct, or where different conduct gave rise to the violations.” Specifically, the guidance provides that “in cases where grouping does not elevate the gravity or classification and resulting penalty, then violations should not be grouped if the evidence allows for separate violations.”

The intention and the effect of the new enforcement standards is and will be increased numbers of citations and a corresponding increase in the number and severity of penalties issued for such violations. Because the construction industry is specifically targeted, contractors should make renewed efforts to fortify their safety and OSHA compliance protocols. 

If you have any questions about the new OSHA enforcement standards, please contact Scott Calhoun. You can e-mail Scott by clicking here. If you have other questions about OSHA enforcement or have been issued a citation, please contact Philip Siegel. You can e-mail Philip by clicking here.

Be On the Lookout! USCIS Redesigns Permanent Resident Cards and Employment Authorization Documents

On February 3, U.S. Citizenship and Immigration Services (USCIS) announced it had redesigned both Form I-551, Permanent Resident Card, which is commonly known as a Green Card, and Form I-766, Employment Authorization Document (EAD). The redesigned Green Card and EAD were first issued on January 30, 2023, although USCIS notes that some Green Cards and EADs issued after January 30, 2023, may still display the previous format. This is of particular importance to employers within the construction industry as it concerns completion of Form I-9 for new hires and re-hires.

Employers in the construction industry are encouraged to familiarize themselves with the redesigned Green Card and EAD to avoid the mistake of turning down an applicant who is otherwise authorized to work on the mistaken belief that the Green Card or EAD does not appear genuine because it differs from what has been its design. You can view the redesigned Green Card through this link. Images of both the older and redesigned versions of both documents can be viewed through this link.

In the meantime, construction employers are reminded that prior and current Green Cards and EADs remain valid, as long as they have not expired (or been automatically extended).

If you have any questions concerning completion of Form I-9 or whether documents presented by applicants or re-hires are legitimate for Form I-9 purposes, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197. Philip is also available to conduct an audit of your Form I-9s.

Employment Law Changes in FY23 Omnibus Appropriations Bill

The Fiscal Year (FY) 2023 Omnibus Appropriations Bill, which was signed into law on December 29, 2022 and set $1.7 trillion in appropriations and allocations of federal funds through September 30, 2023, contained two new employment laws that will impact most employers. These two new laws expand accommodation requirements for pregnant and nursing employees.

The Pregnant Workers Fairness Act

The Pregnant Workers Fairness Act (“PWFA”) requires employers with 15 or more employees to make “reasonable” accommodations for employees affected by pregnancy or childbirth unless accommodations impose an “undue hardship.” Under the PWFA, employees who are pregnant, have pregnancy-related conditions, or have recently given birth are eligible for workplace accommodations to allow them to perform essential job functions.

Up to until now, federal law had only gone so far as expressly prohibiting discrimination against employees because of their pregnancy or pregnancy related conditions. Now, employers must make reasonable accommodations for pregnant employees. Reasonable accommodations may include assigning light duty work, permitting more bathroom breaks, and potentially allowing the employee to work from home.  However, under the PWFA, like the Americans with Disabilities Act, accommodations are typically not considered reasonable if they eliminate an essential function of the job or require creating a new job. 

The PWFA becomes effective on June 27. 

The Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act

The PUMP for Nursing Mothers Act requires employers to allow reasonable break time for employees to express breast milk for one year following the birth of a child. In addition, the PUMP for Nursing Mothers Act requires employers to provide a place, other than a bathroom, that is shielded from view and free from intrusion to employees to express breast milk. However, employers with less than 50 employees are exempt where compliance would present an undue hardship, such as causing the employer significant difficulty or expense to comply with PUMP for Nursing Mothers Act. 

PUMP for Nursing Mothers Act is already in effect. 

Employers should make sure their supervisors, managers, and HR know about these new laws so that when accommodation requests are made, they are handled correctly. 

If you have any questions regarding these two new employment laws, please do not hesitate to call or email either Philip Siegel or Ben Lowenthal. You can e-mail Philip by clicking here, or he can be reached directly at (404) 469-9197. You can e-mail Ben by clicking here, and he can be reached directly at (404) 469-9177.

Speak Out Act is now Law

On December 7, 2022, President Biden signed into law what is commonly referred to as the Speak Out Act. The Act is intended to empower survivors of sexual assault and sexual harasssment to come forward with their claims without fear of violating any pre-dispute non-disclosure contract clauses pertaining to those claims. The Act does this by making unenforceable such clauses that were agreed to prior to the dispute arising.

Agreements that are reached after a claim arises and include non-disclosure provisions will remain enforceable under the law. Consequently, a settlement agreement resolving a sexual harassment claim, for example, may include a non-disclosure provision without running afoul of the Act.

Employers in the construction industry that bind employees to confidentiality agreements or non-disclosure agreements which are intended to protect the company's confidential information and trade secrets should revisit those agreements in light of the Speak Out Act. If a review of those agreements leaves the reader unsure whether the language extends to claims of sexual harassment or sexual assault, revisions to those agreements are likely appropriate.

If you have any questions regarding the Speak Out Act, please do not hesitate to reach out to Philip Siegel or Ben Lowenthal. You can e-mail Philip and Ben by clicking here. 

National Labor Relations Board Decision and General Counsel Guidance on Severance Agreements

On February 21, 2023, in the case of McLaren Macomb, the National Labor Relations Board (“NLRB”) ruled that the broad confidentiality and non-disparagement provisions in the severance agreements at issue violated the employees’ right to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. In the decision, the NLRB found that confidentiality and non-disparagement requirements in the severance agreement were unlawful because employees could interpret the provisions as prohibiting them from discussing their workplace experiences, which the NLRB viewed as central to the exercise of employee rights under the National Labor Relations Act (the “Act”). 

Thereafter, on March 22, 2023, the NLRB’s general counsel, Jennifer Abruzzo, issued a memorandum that provided guidance on questions that employers had presented since the issuance of the McLaren Macomb decision. While the memorandum states that entering into severance agreements with employees is not prohibited, the decision and the guidance from the NLRB’s general counsel will require employers to re-examine their severance agreements as previous forms may now be considered unlawful and, in the NLRB’s general counsel’s opinion, the NLRB may apply the McLaren Macomb decision retroactively. Further, employers may need to re-examine confidentiality and non-disparagement provisions in employee handbooks, policies, and employment agreements to determine whether the McLaren Macomb decision makes such provisions unlawful or if such provisions are at risk of being deemed unlawful if the NLRB rules in future cases in the manner that is consistent with the NLRB’s general counsel’s guidance memorandum. NLRB General Counsel memorandum GC-2023-05 can be found here.

Firm News

We are very proud to announce that Stephen Phillips, Martin Salzman, and Philip Siegel have been named Super Lawyers and Benjamin Lowenthal was named a Rising Star in the 2023 edition of Georgia Super Lawyers. Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

We are honored and humbled to announce that Hendrick, Phillips, Salzman & Siegel has been given recognition by the New World Report as a recipient of a Legal Elite Award for 2023. Our firm has been recognized as the Leading Construction Specialist Law Practice 2023 in the state of Georgia.

02-21-2023 HPSS FIRM NEWS

Hendrick Phillips Salzman & Siegel, PC is proud to announce J.T. Gallagher as the firm's newest partner. J.T. has been a valuable member of the HPSS team since May, 2017, and will play a key role in the future of HPSS Law. Congratulations, J.T.!

01-26-2023 HPSS Law eBlast

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