Category Archives: Legislation

December 17, 2013

Colorado Raises Minimum Wage for 2014: Checklist for Complying with New Employment Developments

New YearBy Jude Biggs 

A new year is just around the corner.  Along with champagne toasts and resolutions to lose weight, January 1 typically brings new laws and regulations in Colorado.  2014 is no different.  Colorado employers should plan now for the changes going into effect in 2014. It is also a good time to make sure you are in compliance with the new laws that took effect in 2013.  Here is a checklist to help you stay on the right side of the law. 

  • Colorado Minimum Wage Goes Up to $8.00 per Hour on January 1.  The Colorado Division of Labor has adopted Minimum Wage Order 30 which raises the state minimum wage from $7.78 (2013) to $8.00 per hour, effective January 1, 2014.  The state minimum wage for tipped employees increases to $4.98 per hour, also effective January 1, 2014.  Colorado’s minimum wage is adjusted annually for inflation pursuant to the Colorado Constitution.  If this applies to any of your workforce, update your payroll practices to comply with the new rate on the first of the year.
  • Marijuana may be Legally Purchased and Possessed on January 1.  Adults may legally buy, use and possess small amounts of marijuana in Colorado beginning January 1st.  Because marijuana is still illegal under federal law, Colorado employers may continue to have workplace policies banning its use by employees and prohibiting possession of marijuana on company premises.  Review and if necessary, update your policies to reflect that use of controlled substances and drugs that are illegal under either state or federal law are not permitted.  The new year is a good time to communicate this to your employees.
  • Rules Implementing Employment Opportunity Act (Credit History Law) Effective January 1.  Colorado’s Employment Opportunity Act, section 8-2-126, C.R.S., was enacted last spring and went into effect on July 1, 2013, restricting an employer’s use of credit history information on employees and applicants.  (See our post on that new law.) The Division of Labor has adopted new rules, 7 CCR 1103-4, that go into effect on January 1 to implement the provisions of the act.  The new rules include a couple of new definitions and clarifications not found in the act itself, including that “consumer credit information” does not include income or work history verification and that “prevailing party” means the employee who successfully brings, or the employer who successfully defends, the complaint.  The new rules also describe the enforcement mechanism for violations, including how complaints must be filed, the investigation process, initial decisions and appeals.
  • Rules Implementing Social Media and the Workplace Law Effective January 1.  Last spring, Colorado enacted a law, found at section 8-2-127, C.R.S., that restricts an employer’s access to personal online and social media sites of employees and applicants.  (We previously wrote on that law here.)  The law went into effect on May 11, 2013 but new rules implementing the law go into effect on January 1, 2014.  In large part, the rules, 7 CCR 1103-5, mirror the act itself but add that it is OK for an employer to access information about employees and applicants that is publicly available online.  The new rules also detail the complaint, investigation, decision, appeals and hearing process.
  • 2013 Family Care Act Extends FMLA Coverage to Care for Civil Union and Domestic Partners.  Effective August 7, 2013, Colorado’s Family Care Act, section 8-13.3-201 et seq., C.R.S., extends leave benefits under the federal Family and Medical Leave Act (FMLA) to eligible employees to care for their civil union and domestic partners with a serious health condition.  If you are a covered employer under the FMLA, ensure that your FMLA forms, policies and practices provide that eligible employees may take leave to care for a seriously ill or injured civil union or domestic partner.  Also, for multi-state employers subject to the FMLA, remember that if you have employees in states that recognize same-sex marriages, the FMLA definition of “spouse” will include employees’ same-sex spouses due to the U.S. Supreme Court’s decision in United States v. Windsor (further discussed here).
  • Age 70 Cap on Colorado Age Discrimination Claims Eliminated in 2013.  Colorado’s legislature enacted changes to the Colorado Anti-Discrimination Act (CADA).  Effective August 7, 2013, there is no longer an upper age limit of 70 years old for age discrimination claims under CADA, section 24-34-301, et seq..C.R.S.  This brings Colorado’s age discrimination law in line with the federal Age Discrimination in Employment Act which makes it unlawful to discriminate against employees and applicants on the basis of age 40 or older with no upper age limit.
  • Prepare for Changes in Remedies Available for Colorado Discrimination Claims Beginning January 1, 2015.  Colorado added new remedies, including punitive damages, that may be recovered for violations of CADA for claims alleging discrimination or unfair employment practices that accrue on or after January 1, 2015, section 24-34-405. C.R.S.  With a year to prepare, now is the time to get policies in place to address reasonable accommodations, complaint procedures and other good faith measures to resolve workplace discrimination issues. 

Start the year off right by making sure you comply with these new developments in Colorado employment laws. We wish you a happy, healthy, prosperous and compliant 2014! 

For more information, contact Jude at 303-473-2707 or jbiggs@hollandhart.com.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 21, 2013

Tips for Paying Wages via Payroll Cards

By Mark Wiletsky 

DebitcardOffering payroll cards for the payment of employee wages may be a viable, cost effective alternative to paper paychecks.  It also can be an attractive offering for workers who do not have a checking or savings account at a bank or other financial institution.  Employers must be aware, however, that certain federal and state laws regulate payroll card accounts.  The Consumer Financial Protection Bureau (CFPB) recently issued Bulletin 2013-10 describing the application of the Electronic Fund Transfer Act (EFTA) and Regulation E, which implements the EFTA, to payroll card accounts.  Here are some tips for keeping your payroll card program in compliance with these laws. 

  • No Mandatory Use of Payroll Cards. You may not require that employees be paid on a payroll card from a particular institution.  You may offer payroll cards as a method of wage payment as long as you offer an alternative method, such as direct deposit to an account of the employee’s choosing or paper paychecks.  Acceptable methods of paying wages typically are governed by state wage payment laws.
  • Disclosure of Fees, Transfers, and Other Payroll Card Requirements. Employees to be paid on a payroll card are entitled to be informed of any fees, limitations or requirements related to making electronic fund transfers with the card that will be imposed by the financial institution who issues the card.  Clear, understandable written disclosures must be provided to cardholders in a form that the consumer may keep.
  • Account History Must Be Accessible.  The payroll card issuer must make each cardholder’s account history available, either through periodic statements, telephone balance inquiries, internet/web-based account history, or by providing 60 days of written account history upon request of the cardholder. 
  • Cardholder Liability for Unauthorized Use Must Be Limited.  Payroll cardholders are entitled to limited liability protections for the unauthorized use of their payroll cards, however they must report any unauthorized transfers in a timely period.
  • Cardholders’ Rights to Error Resolution.  Upon the timely report of an error regarding a payroll card account, financial institutions must respond to the cardholder.  In order to ensure a response, the cardholder must report an error within 60 days of either accessing his or her payroll card account history or receiving a written account history containing the error, whichever is earlier, or within 120 days after the alleged error occurred. 

In addition to the federal payroll card laws, state wage payment laws often regulate when and how payroll cards may be used to pay employee wages.  For example, in Colorado, employers may deposit employee wages on a payroll card provided the employee may access the full amount on the card for free at least once during the pay period, or the employee is given the choice to receive their pay through other means, such as direct deposit to an account of the employee’s choosing or a paycheck.  Be certain to check the wage payment laws in the states in which you operate to ensure compliance with any state payroll card requirements.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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September 3, 2013

OFCCP Announces New Veterans and Disability Regulations for Contractors

By Brad Cave 

OFCCP-logoLast week, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced Final Rules that are intended to improve job opportunities for disabled workers and veterans.  Whether the rules will accomplish that purpose is uncertain; what is clear is that the new rules greatly increase affirmative action requirements and burdens on federal contractors.    Under the new regulations, federal contractors and subcontractors face significantly increased documentation, data collection, recordkeeping and hiring goals. 

Key Provisions of New Disability and Veterans Regulations 

On August 27, 2013, OFCCP released the content of its Final Rules that change the regulations implementing Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act as amended by the Jobs for Veterans Act of 2002 (VEVRAA).  Section 503 of the Rehabilitation Act of 1973 prohibits discrimination in employment decisions against individuals with disabilities and requires federal contractors and subcontractors to take affirmative action to recruit, hire, promote and retain disabled workers.  VEVRAA prohibits federal contractors and subcontractors from discriminating against protected veterans and requires affirmative action in employing these veterans.  The key provisions of the Final Rules that change the regulations implementing these laws include: 

  • A 7% Utilization Goal for Qualified Individuals with a Disability.  For the first time, contractors must strive to employ disabled workers at a level that reaches 7% of each job group.  For contractors with 100 or fewer employees, the 7% goal applies to the contractor’s entire workforce, rather than each job group.  OFCCP states that this is not a quota and failure to meet the disability utilization goal will not, by itself, constitute a violation of the regulation.  However, OFCCP requires contractors to conduct an annual utilization analysis to find deficient areas and determine specific actions to rectify identified problems.

 

  • Establishing Hiring Benchmarks for Veterans.  Without setting a specific utilization goal for hiring veterans, OFCCP will require federal contractors to establish hiring benchmarks each year for protected veterans.  Contractors may choose to use the national percentage of veterans in the civilian labor force, as updated annually by OFCCP (currently 8%), as a benchmark, or may establish their own benchmark using a combination of data from the Bureau of Labor Statistics, Veterans’ Employment and Training Service and the contractor’s unique hiring circumstances.

 

  • Collect and Retain Comparison Data on Disabled and Veteran Applicants and Employees.  Under the Final Rules, contractors must document quantitative comparisons of the number of disabled workers and veterans who applied for jobs and the number hired.  The data must be compiled annually and retained by the contractor for three years in order to track trends and measure outreach efforts.

 

  • Ask Applicants and Employees to Self-Identify as Individuals with a Disability and as a Veteran.  The Final Rules mandate that employers invite applicants at both the pre-offer and post-offer stage to self-identify themselves as individuals with a disability and as veterans.  The Final Rules further require that contractors invite their current employees to self-identify at least every five years.  OFCCP offers sample self-identification language.

 

  • Mandated Equal Opportunity Clause in Subcontracts.  Under the Final Rules, contractors must include specific language to incorporate the equal opportunity clause into subcontracts so that subcontractors know their responsibilities as federal contractors.

 

  • Provide OFCCP Access to Records.  The Final Rules specify that contractors must allow OFCCP to review documents related to a focused review or compliance check either on-site or off-site, at OFCCP’s option.  OFCCP can request that contractors reveal all formats in which they maintain records and then request the records in whatever format OFCCP chooses.

 

  • Updates to Comply with the ADAAA.  The  Final Rule related to the disability regulations updates the regulations in light of the revised definition of “disability” and certain nondiscrimination provisions under the ADA Amendments Act of 2008 (ADAAA).

 


Still Burdensome, But Some Proposals Slightly Watered Down  

Federal contractors were critical of the many regulatory changes first proposed by the OFCCP in 2011.  OFCCP received many comments in response to the proposed rules and made some modest improvements based on those comments.  For example, the proposed rules sought to impose a five-year recordkeeping requirement.  The Final Rules reduced that requirement to three years.  The proposed disabilities rule sought to require contractors to review their physical and mental job qualifications on an annual basis while the Final Rule allows contractors to establish their own schedule for reviewing job qualifications.  Despite these and other small revisions from the proposed to the final regulations, the Final Rules add significant burdens on contractors who must revamp their employment policies and documentation practices to comply with the new regulations.

So, Are You Sure You’re Not Disabled? 

The new hiring quota for disabled individuals places employers in a very awkward position.  For the first time, employers are required to ask and need to know whether applicants and employees consider themselves to be disabled.  Under these rules, employers are expected to meet the 7% “goal” by workgroup.  But some employees who meet the definition of disabled will not consider themselves to be disabled or be reluctant to disclose their status to their employer.  The OFCCP recognized that a study has shown that only about 50% of those with disabilities are likely to self-identify.  The OFCCP is not concerned about this high degree of inaccuracy.  According to its preamble to the new rules, even inaccurate data which greatly underreports the number of disabled applicants and employees will still assist the contractor and the OFCCP to evaluate the contractor’s hiring and selection process!  Stated differently, the OFCCP does not care if the data is faulty by as much as 50% as long as it has some data on which to base its enforcement decisions. 

The OFCCP also suggested that employers should designate individuals as disabled, even if they decline to self-identify, where the disability is obvious or the employer knows about the disability.  Of course, for years we have cautioned employers to never label an employee as disabled to avoid “regarded as” claims under the ADA.   Now, employers who are federal contractors will have an incentive to identify employees as disabled to meet the goal, and have the OFCCP’s permission to do so.  In an interesting twist, the OFCCP’s permission for employers to designate employees as disabled was explained in the preamble to the new rule, not in the new regulations.   Since the preamble does not have the force and effect of law, the OFCCP’s permission is not likely to have much value as a defense to an employee’s allegation that the employer regarded them as disabled when the employer designates the employee for purposes of complying with this rule.  While federal contractors may have little choice if a disabled employee declines to self-identify, it will continue to be very important for employers to keep all such designations strictly confidential and out of the hands of supervisors and managers. 

Effective Date of the Disability and Veterans Affirmative Action Final Rules 

The Final Rules become effective 180 days after they are officially published in the Federal Register which is expected to occur in the next two weeks.  Consequently, contractors have about six months to get policies and procedures in place to comply with the new regulations.  Contractors subject to written affirmative action plan requirements are allowed to continue with the plan they have in place on the effective date of the Final Rules.  However, the next cycle of their affirmative action plan must be drafted to comply with the new regulations. 

OFCCP will be hosting webinars on the new regulations.  Information about the webinars and the Final Rules may be found on the OFCCP website: http://www.dol.gov/ofccp/.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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July 22, 2013

Myriad of Social Media Privacy Laws Create Havoc for Multi-State Employers

By Elizabeth Dunning 

ComputerDoes your company request that your employees and applicants provide user names and passwords to their personal social media accounts?  Do you require applicants to log onto their online accounts in your presence so that you can view their content?  Perhaps you ask employees to “friend” their supervisors.  If you haven’t followed new developments in state employment laws, you may not realize that such activities are unlawful in some states.  In just two years, eleven states have passed social media privacy laws that prevent employers from accessing employees’ and applicants’ personal online accounts.  Each state law differs in certain respects, making it difficult for multi-state employers to adopt a uniform and consistent social media policy.  To help sort things out, we highlight here the primary differences in the state social media privacy laws. 

States with Workplace Social Media or Internet Privacy Laws 

The eleven states that have enacted social media or internet privacy laws affecting employers to-date are:  Arkansas, California, Colorado, Illinois, Maryland, Michigan, Nevada, New Mexico, Oregon, Utah and Washington.  All but one of these states protect the access information for both current and prospective employees, with New Mexico only protecting the log-in information of applicants. 

Differences in State Social Media Laws 

Generally, all of these states prohibit an employer from requesting or requiring an employee or applicant to disclose his or her user name, password or other means of accessing his or her personal social media accounts. Many of these states also make it unlawful to discipline, discharge, discriminate against or penalize an employee, or fail to hire an applicant who refuses to disclose his or her access information to personal social media accounts.  However, that’s where the uniformity in the laws generally ends.  The following chart highlights numerous key differences between the state laws. 

Legal Provision

States Recognizing Provision

Prohibits employers from requesting that employee add employer representative or another employee to his or her list of contacts (e.g., “friend”)

Arkansas, Colorado, Oregon and Washington

Prohibits employers from requesting employee to access his or her personal social media account in the presence of the employer (“shoulder surfing”)

California, Michigan, Oregon and Washington

Prohibits employers from requesting employee to change the privacy settings on his or her personal social media accounts

Arkansas, Colorado and Washington

Specifically permits employers to view and access social media accounts that are publicly available

Arkansas, Illinois, Michigan, New Mexico, Oregon and Utah

Exception when access required to comply with laws or regulations of self-regulatory organizations

Arkansas, Nevada, Oregon and Washington

Exception for investigations of employee violation of law or employee misconduct

Arkansas, California, Michigan, Oregon, Utah and Washington (Colorado and Maryland limit this exception to investigation of securities or financial law compliance)

Exception for investigation of unauthorized downloading of employer’s proprietary, confidential or financial data

Colorado, Maryland, Michigan, Utah and Washington

Inadvertent acquisition of personal log-in information while monitoring employer systems not a violation but employer not permitted to use the log-in information to access personal social media accounts

Arkansas, Oregon and Washington

As you can see, the differences in the laws exceed the similarities, making it difficult for an employer operating in more than one covered state to comply with all applicable provisions.  Even the definition of covered social media accounts varies by state, creating even more inconsistencies. 

Would a Federal Law Help? 

With eleven laws in place and almost 20 additional states considering social media privacy bills, the issue seems ripe for a federal bill that would bring some uniformity to the protections offered to employees and applicants.  In February 2013, the Social Networking Online Protection Act, which offers such workplace protections, was introduced into the U.S. House of Representatives.  Unfortunately, it has languished in committee and is not expected to pass.  In addition, a federal law on the issue will likely only simplify the web of state laws if it specifically preempts state law.  Without federal preemption, we might face two sources of law on the issue, federal and state, which might muddy the waters even more.  In any event, it does not appear that a federal law will be enacted before additional states enact their own laws, leaving employers to struggle with the variances in state law. 

Best Practices for Complying with Social Media Privacy Laws 

With the vast amount of information available on social media and the increased use of social networking platforms for business purposes, it is likely that most employers will at some point need to access or review content on an employee’s or applicant’s social media account.  Perhaps it will be for an investigation of an employee who downloaded proprietary information or perhaps it will be to confirm derogatory statements about the company made by an employee.  Whatever the reason, the first step is to recognize that these laws exist and you will need to review which, if any, apply to your company and/or the employee involved.  Remember that you are generally free to access publicly available social media content.  However, if one of these state laws applies, consult with legal counsel before accessing (or requesting access to) any personal social media accounts to determine what restrictions and exceptions are applicable to your particular circumstances. 

Establish a social media policy specifying that employees are not permitted to disclose or post proprietary or confidential company information on their personal social media accounts.  Make a clear delineation between company/business-related social media accounts where you control who speaks on behalf of your organization, and personal accounts where employees do not represent the views of the company. Be careful that your social media policy does not run afoul of the National Labor Relations Act by interfering with employees’ right to discuss their wages and working conditions in a concerted manner.  Communicate your policy to your employees through normal channels, such as your employee handbook, online policy/intranet, etc. 

Train your supervisors, managers and human resources staff on these laws.  Sometimes supervisors or HR folks think it is acceptable to ask an employee to “friend” them online, or to ask for their log-in information to view pictures or other benign posts.  Despite good intentions, company representatives could get you into legal trouble so advise them of these laws and your restrictions on requesting access to personal social media accounts.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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July 3, 2013

ACA Employer Health Care Mandate – “Pay or Play” – Put Off Until 2015

By Elizabeth A. Nedrow

Health insuranceIn our Alert a few months ago, we described the so-called “pay or play” penalty provisions affecting employers under the federal health care reform statute known as ACA (the Patient Protection and Affordable Care Act).  Yesterday the Obama Administration informally announced that it will delay implementation of pay or play until 2015.  Yesterday’s announcement included a promise to publish formal guidance regarding this change within the next week.

Reducing the Complexity of ACA Implementation

The Administration cites complexity of the pay or play requirements as the reason behind this delay in implementation.  In response to concerns by businesses that they need more time to understand and comply with the complex law, the Treasury Department states that they are looking to simplify the new reporting requirements.  Mark Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, wrote: “Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.”  Mazur states that the Administration will work with employers, insurers and other reporting entities to voluntarily implement information reporting in 2014 so that they may conduct “real world testing” of reporting systems which should lead to a smoother implementation in 2015.

Look for Additional ACA Guidance Soon

While employers certainly welcome the news that there is more time to comply with ACA mandates, the delay doesn’t mean employers can take the summer off.  As noted above, we can expect formal guidance on pay or play implementation in the next week, and additional action may be required after that.  In addition, the Administration’s announcement states a hope that employers will voluntarily comply with pay or play in 2014 (including the reporting systems), so that implementation in 2015 will go smoothly.  Other provisions of ACA, such as the requirement that individuals have health insurance coverage or pay a penalty (the individual mandate), elimination of pre-existing condition exclusions, and the operation of health insurance exchanges, are still currently scheduled to go into effect on January 1, 2014.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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June 19, 2013

Wyoming Employers – Time to Pay More Attention to those Unemployment Claims

320px-Flag_of_Wyoming_svgBy Brad Cave 

July 1 creates some new incentives for Wyoming employers to participate in the unemployment claims system.  Currently, UI benefits are paid to the employee beginning immediately when a deputy clerk of the Wyoming Department of Workforce Services determines that the employee is entitled to benefits.  If the employer appeals that determination, and a hearing officer reverses the deputy’s decision, the employer’s account is not charged for the benefits paid under the deputy’s erroneous decision.  The same is true if the employer obtains reversal of a decision granting benefits through an appeal to the Unemployment Insurance Commission or the district court. 

Effective July 1, this general rule has an exception that all employers should keep in mind.  Bowing to federal pressure, the Wyoming Legislature amended the Wyoming Employment Security Law (ironic name for the unemployment benefit statute, isn’t it) to require employers to respond to requests for information from the Department.  See, http://legisweb.state.wy.us/2013/Enroll/SF0073.pdf  Employers will no longer escape the monetary consequences of erroneous payments if the Department determines that, (1) an erroneous payment of benefits was made because the employer was at fault for failing to respond adequately or on time to a written request for information; and, (2) the employer has established a pattern of failing to respond adequately or on time to such requests.  The employer’s responses must be received within fifteen (15) days after the Department sends the request, whether by regular mail or email.   What constitutes a pattern of failing to respond remains to be seen – the Legislature said only that the phrase means a “repeated documented failure” to respond to written requests for information, “taking into consideration the number of instances of failure in relation to the total volume of requests by the Department” to the employer. 

Action items for Wyoming employers: 

1.  Maintain documentation of your responses to the Department on unemployment claims.  We don’t believe that certified mail is necessary for most employers, but we do suggest keeping copies of all the documentation you return in response to a request.  Also, the amendment requires the Department to acknowledge receipt of the requested information within fifteen (15) days if the employer requests such acknowledgement. 

2.  Some employers use a third-party agent or centralized offices in remote states to respond to unemployment claims.  Be sure to notify those who process your UI claims, as the amendment clearly holds the employer responsible for delays or inadequate information from an employer’s agent.  Likewise, if you have drug your feet getting back to your UI agent with the necessary information, now is the time to improve your response time so the agent does not blame you for a “pattern of failing to respond.” 

3.  As always, be very careful about what you (or your agent) say or submit in response to a request for information.  A determination for or against an employee regarding unemployment benefits is not “binding, conclusive or admissible” in any subsequent litigation between the employer and employee.  But the employer can be bound by what it says were the reasons for termination and the documents it submits to support the termination.  Any discrepancy in the employer’s reasons can weaken your objection to the UI claim and be used in other legal proceedings to challenge the legitimacy of your reasons for the termination.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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June 17, 2013

New Nevada Law Restricts Use of Credit Checks for Employment Purposes

By Anthony Hall and Dora Lane 

Nevada recently joined the ever-growing list of states that restrict the use of credit reports by employers.  Effective October 1, 2013, Senate Bill 127 will, with limited exceptions, prohibit Nevada employers from making an adverse employment decision based on credit information and from requesting or requiring any prospective or current employee to submit a consumer credit report as a condition of employment.   

Use of Credit Reports as an Unfair Employment Practice 

By amending the Employment Practices chapter of the Nevada Revised Statutes, Senate Bill 127 makes it unlawful for any Nevada employer to: 

1)  Directly or indirectly require, request, suggest or cause any employee or prospective employee to submit a consumer credit report or other credit information as a condition of employment; 

2)  Use, accept, refer to or inquire about a consumer credit report or other credit information; 

3)  Discipline, discharge, discriminate against or deny employment or promotion, or threaten to take such action, against any prospective or current employee on the basis of the results of a credit report or for refusing or failing to provide a credit report; or 

4)  Discipline, discharge, discriminate against or deny employment or promotion or threaten to take such action against any prospective or current employee for filing a complaint or instituting (or causing to be instituted) a legal proceeding under this law, testifying in any legal proceeding (actually or potentially) to enforce the provisions of this law, or exercising (individually or on behalf of another) rights afforded under this statute. 

Exceptions Allowing the Use of Credit Information 

Under this new law, employers are permitted to request or consider consumer credit reports or other credit information for the purpose of evaluating an employee or prospective employee for employment, promotion, reassignment or retention under the following circumstances: 

  • When required or authorized by state or federal law;
  • Upon reasonable belief that the individual has engaged in specific activity which may constitute a violation of state or federal law; or
  • When information in the credit report is reasonably related to the position for which the employee or prospective employee is being considered (including retention as an employee). 

For most employers seeking to use credit reports to evaluate employees and applicants, it is this last exception that typically comes into play.  Importantly, the new law defines what shall be deemed “reasonably related” to include positions where the duties involve one or more of the following non-exclusive categories:

Care, custody and handling of, or responsibility for, money, financial accounts, corporate credit or debit cards or other assets;

  • Access to trade secrets or other proprietary or confidential information;
  • Managerial or supervisory responsibility;
  • The direct exercise of law enforcement authority as a state or local law enforcement agency employee;
  • The care, custody and handling of, or responsibility for, the personal information of another person;
  • Access to the personal financial information of another person;
  • Employment with a financial institution chartered under state or federal law (including subsidiaries or affiliates of such financial institutions); or
  • Employment with a licensed gaming establishment.

Public and Private Enforcement of Credit Report Law 

This new law provides for two types of enforcement mechanisms with a three year statute of limitations.  First, an individual harmed by a violation of this statute may file a private lawsuit against the allegedly offending employer.  The lawsuit may be filed on behalf of the individual employee or prospective employee, or on behalf of other similarly situated employees or prospective employees.  Courts may grant successful plaintiffs various remedies including employment, reinstatement or promotion to the position applied for, lost wages and benefits, attorney’s fees and costs and any other equitable relief deemed appropriate (without the issuance of a bond). 

Second, the Nevada Labor Commissioner may impose an administrative penalty against an employer of up to $9,000 for each violation of the law or may bring a civil lawsuit against the employer to obtain equitable relief as may be appropriate, such as employment, reinstatement or promotion of the employee and the payment of lost wages and benefits.   

Complying with Credit Restriction Laws in Ten States 

In enacting this new law, Nevada became the tenth state to restrict the use of credit reports for employment purposes, joining California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington.  Additional states are considering similar legislation.  Further, the Equal Employment Opportunity Commission (EEOC) has targeted employers for the use of credit reports as potentially causing disparate impact on certain protected groups.  Complying with these laws can be challenging, especially for multi-state employers. 

Prior to the October 1, 2013 effective date of Nevada’s new law, employers who use credit reports or credit information in their hiring or evaluation process need to review their screening policies.  Specifically, employers hiring individuals in Nevada need to evaluate each position for which they want to use credit reports and determine if the position falls under one of the enumerated exceptions in Senate Bill 127 that allows the use of credit information on applicants and/or current employees.  If the duties of the position do not fall within the list of exceptions, employers should evaluate whether the credit report “is reasonably related to the position.”  If the answer to both of these questions is “no,” then the employer should not request or use credit reports or other information from a consumer reporting agency when evaluating candidates for that position.  Employers with operations or hiring needs in multiple states need to stay abreast of the latest legal requirements to ensure that their credit screening policies comply with each applicable state restriction. This may mean implementing a different credit screening policy in those states where the use of credit reports is restricted by law.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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May 29, 2013

October 1 Deadline for Employers to Provide Notice of Health Care Exchange

Calendar_October_01By Elizabeth Nedrow

Employers recently were given the green light on a notice requirement related to health care reform. 

The central feature of much of health care reform is the exchange system. No later than October 1, 2013, employers must provide each employee a written notice:

  • Informing the employee of the existence of the exchange including a description of services provided by the exchange, and the manner in which the employee may contact the exchange to request assistance;
  • Explaining that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the exchange; and
  • Including a statement informing the employee that if the employee purchases a qualified health plan through the exchange rather than choosing employer-offered health coverage (if any), the employee may be foregoing the employer's contribution (if any) to the employer-offered health coverage, as well as a statement that such employer contributions are often excludable from income for federal income tax purposes.

 Read our entire alert on this notice requirement here. 

May 7, 2013

Small Colorado Employers Face Higher Damages for Discrimination Claims

By Mark Wiletsky and Steve Gutierrez

Small businesses beware: your employees now have more incentive to sue you.  As of January 1, 2015, employees can recover compensatory and punitive damages for employment discrimination claims against businesses that employ between one to fourteen people under Colorado’s Job Protection and Civil Rights Enforcement Act of 2013, signed into law by Governor John Hickenlooper on Monday, May 6, 2013.  But don’t despair.  By taking some proactive steps now, businesses can minimize their exposure to potential claims. 

Increased Exposure for Small Employers 

Colorado’s new anti-discrimination law changes the landscape for small employers by allowing compensatory and punitive damages against Colorado’s small businesses (with 1-14 employees), along with attorneys’ fees and costs to the employee if he or she prevails, back pay, front pay, interest, and other potential relief.  Thankfully, the new Colorado law contains some safeguards against outrageous damage awards that would likely put small employers out of business.  For businesses with 1-4 employees, compensatory and punitive damages are capped at $10,000.  For businesses with 5-15 employees, such damages are capped at $25,000.  Businesses with greater than 15 employees are subject to the existing damages caps found in the federal anti-discrimination laws. 

The availability of these damages to employees of businesses with fewer than 15 employees will likely result in more discrimination cases filed in Colorado against small businesses, significantly raising the potential exposure for small business owners.  That is especially true given that such claims may be filed in state court, which is often viewed by attorneys representing employees as a more favorable forum for such claims. 

Age Discrimination No Longer Cut Off at Age 70 

The Job Protection and Civil Rights Enforcement Act of 2013 also eliminates the age 70 cutoff for age discrimination claims brought under Colorado law.  This brings the state law into line with the federal Age Discrimination in Employment Act which does not have an upper age limit.  Consequently, employees age 40 and older are protected from employment discrimination under both state and federal law. 

Good Faith Efforts May Avoid Punitive Damages 

Under the new Colorado law, employers will not be subject to punitive damages if they can demonstrate good-faith efforts to prevent discriminatory and unfair employment practices in the workplace.  In addition, no punitive damages are available in a lawsuit involving a claim of failure to make a reasonable accommodation for a disability if the employer can demonstrate good-faith efforts to identify and make a reasonable accommodation that would provide the disabled employee with an equally effective opportunity and would not cause an undue hardship on the employer’s operation.  Small businesses should begin those good-faith efforts now so that policies and procedures to prevent and respond to discrimination are in place when the law goes into effect. 

Steps Small Businesses Should Take to Minimize Risk 

Unfortunately for small businesses, the mere threat of a lawsuit, however meritless, may stretch tight resources to the breaking point.  That is why it is so important to take proactive measures now, which will help minimize the risk of such lawsuits.  Among other things, small businesses should:  

1)  Adopt and distribute policies that prohibit discrimination, harassment, and retaliation in the workplace.  Require new and existing employees to acknowledge their receipt of these policies, preferably on an annual basis. 

2)  Train supervisors, managers and employees.  Everyone in the workplace should be trained on your anti-discrimination policies and procedures with specialized training provided to supervisors and managers who must recognize harassment and discrimination and know what to do when they observe it or receive a complaint.  In small workplaces, dealing with complaints of discrimination or retaliation can be difficult.  Still, if you address it promptly and appropriately, you will be in a better position to avoid or defend against a claim. 

3)  Document performance issues.  We often see meritless lawsuits filed because legitimate performance concerns were not shared with the employee or appropriately documented.  If an employee has performance issues, be sure to get it in writing.  Focus on the problem, give concrete examples, and warn the employee that a failure to achieve immediate and sustained improvement may result in termination. 

4) Arbitration agreements. Consider whether it would be appropriate to have employees sign an arbitration agreement.  Such agreements take discrimination claims out of the civil court system, and generally allow for a more streamlined resolution.  However, arbitration is not necessarily cheaper than a court proceeding; in fact, in some cases it might cost more.  Be sure to consider all the benefits and burdens of arbitration before relying on such agreements.  And if you prefer arbitration, make sure your agreement complies with all applicable legal requirements.   

Essentially, small employers need the same policies and procedures to deal with discrimination as larger employers do, even though many smaller employers simply do not have the same resources.  Take the next 18 months before the law becomes effective to educate yourself, your supervisors and your employees on discrimination issues and take the steps that will help minimize your risk to the damages that will be available soon to aggrieved employees.