New Form I-9

The U.S. Citizenship and Immigration Services (USCIS) published a revised version of Form I-9, Employment Eligibility Verification.  This new form (dated 11/14/2016) must be used by employers as of January 22, 2017.  The form can be found here, and additional information is available here.  The new form has instructions on a separate page and is being lauded as easier to fill-out on a computer.  The USCIS press release also states that it now has:

  • Prompts to ensure information is entered correctly.
  • The ability to enter multiple preparers and translators.
  • A dedicated area for including additional information rather than having to add it in the margins.
  • A supplemental page for the preparer/translator.
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Arizona’s Proposition 206 Addressing Paid Sick Leave Was Approved by Voters

3d Arizona on mapTuesday evening, Arizona voters approved Proposition 206 by a wide margin.  My colleague, John Lomax, has provided a helpful summary of the new law affecting paid sick leave.

The proposition will raise the minimum wage to $10.00 per hour in January 2017, rising to $12.00 per hour by 2020, and indexed to inflation thereafter.  The measure also included paid sick time obligations for employers to provide employees.  Here is a summary of the new law:

  • For large employers (more than 15 employees), the Paid Sick Time (PST) requirements extend to both hourly and salaried employees.
  • The accrual of PST should begin no later than July 1, 2017, so companies have a little time to plan further.  Note, for employees hired after July 1, 2017, companies can require them to work 90 days before they can use the accrued PST.
  • The accrual is one hour for every 30 hours worked.  The proposition allows companies to assume salaried, exempt employees work 40 hours a week.
  • There is a cap as 40 hours (or 5 days) of accrued PST.  The proposition provides the employee is not entitled to accrue/use more than 40 hours per year.  Once the PST are fully accrued (at 1200 hours), the employer does not need to accrue additional time.  The cap for small employers is 24 hours.
  • The proposition allows employees to carry over PST, but subject to the limitations on usage and accrual.  If the company pays out the earned PST at the end of the year and grants the full allotment of PST for the following year, then there does not need to be carryover.
  • The company does not need to pay out the PST on termination of employment, but if the same employee is rehired within 9 months of termination, the accrued, unused PST needs to be reinstated and the employee can use that balance immediately on rehire.
  • Companies are required to have a notice that outlines what is available to employees, how to use it, etc.
  • Companies cannot count use of PST as an absence that leads to discipline or termination.
  • The company must permit employees to use PST in the smaller of hourly increments or the smallest increment that its payroll system uses to account for absences or other time.
  • Companies cannot require employees, as a condition of using PST, to find a replacement worker.
  • Companies cannot retaliate against employees for using or seeking to use PST.
  • Companies are required to keep records showing compliance for four years.
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The Election Day Edition – An Overview of the Candidates’ Views of Workplace Laws

Only one day away from an election that, at best, can be described as a rollercoaster. The Arizona readers of the blog have undoubtedly observed that activity is at a high in this state since–for the first time in many years–Arizona is considered a battleground state. Whether you are pro-Hillary or pro-Donald, here are some highlights on their views of workplace laws, such as minimum wage.

Happy Voting!

Secretary Hillary Clinton


It has widely been discussed that Clinton plans to raise the minimum wage to $12. Arizona, Colorado, Maine, and Washington already have measures on their ballots to increase the minimum wage over the next four years to $12.00 and the latter to $13.80.

Some of the items in Secretary’s plan applicable to the workforce are:

Reward companies that share profits with their employees, not just their executives

Fight for unions that built the great American middle class and strengthen collective bargaining

Encourage businesses to provide worker training and apprenticeships

End the tyranny of “quarterly capitalism” and encourage companies to invest in America for the long-run

Reform our tax code to reward businesses that invest in jobs in the United States, and impose an exit tax on companies that move overseas to avoid paying their taxes

Strengthen our antitrust laws and enforcement so businesses get ahead by competing and benefitting their customers – not by unfairly concentrating markets

Claw back the special tax breaks that corporations receive for locating research and production here at home if they ship jobs overseas, and use the proceeds to invest in America

Make the minimum wage a living wage and fight for equal pay

Pursue worker-friendly policies to make it harder for companies to race to the bottom in search of profits

Defend Wall Street reform and push for new measures to ensure that Wall Street never threatens Main Street again


In Arizona, Secretary Clinton spoke about diversity and embracing the various cultures within the United States. She also focused some of her talk on workplace issues–such as raising the national minimum wage and guaranteeing equal pay for women’s work.



Donald Trump

Trump, on the other hand, supports an increase of the minimum wage to $10 an hour, but wants states to guide the changes in regulations. Some have argued Trump has changed his perspective on minimum wage; however, the recent conversations suggest he does support an increase.


Trump’s vision includes his plan to:

Create a dynamic booming economy that will create 25 million new jobs over the next decade. For each 1 percent in added GDP growth, the economy adds 1.2 million jobs. Increasing growth by 1.5 percent would result in 18 million jobs (1.5 million times 1.2 million, multiplied by 10 years) above the projected current law job figures of 7 million, producing a total of 25 million new jobs for the American economy.



You can read his plan to create 25 million jobs here. He says he will “[a]sk all Department heads to submit a list of every wasteful and unnecessary regulation which kills jobs, and which does not improve public safety, and eliminate them.”

White House

And last–a couple extra pictures and a video from the Clinton rally for those readers who asked about the experience at the rally:

Here's the crowd. I heard reports of 10-12k.

Here’s the crowd. I heard reports of 10-12k people attending.

The rec/fitness center at ASU. The only place you can work out and watch a political speech live.

The rec/fitness center at ASU. The only place you can work out and watch a political speech live.

Ann Kirkpatrick and Gabby Giffords

Ann Kirkpatrick and Gabby Giffords

Me - the writer of this blog.

Me – the writer of this blog.


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Resource for Companies Evaluating Compliance with New Overtime Laws

IMG_5802Many companies are in the process of completing internal audits to prepare for the new salary and overtime rules that go into effect on December 1, 2016. While the changes do not impact the duties-portion of FLSA exemptions, they do change the salary levels for exempt workers and highly compensated employees.

While December sure sounds far away, it is really just around the corner, considering that employees may need to be reclassified, job descriptions updated, and policies modified that could be impacted by the changes (e.g., telecommuting, social media, recording of time).

Recently, I was speaking with a human resources group that had some fantastic questions about the new law and what the changes would require and I came across an equally *fantastic* resource published by the Department of Labor. It answers those burning questions like:

Will the salary level be prorated for part-time employees?  (Spoiler alert: The DOL says, no.  Whether a worker is full-time or part-time, the standard salary level to qualify for exemption will be $913 per week.)

Does the final rule have an impact on the salary basis or hourly rate for computer professionals?  (Spoiler alert: The hourly salary didn’t change but the weekly standard salary has increased.)

When do the “quarterly” catch-up payments take place—is it calendar year? Fiscal quarter? (Spoiler alert: Up to the employer’s discretion to determine the quarter.).

What about a surprise, discretionary holiday bonus, can that be included in a catch-up payment? (Spoiler alert: No.)

Is there still an exemption for outside sales persons? (Spoiler alert: Yes.)

These questions, answers, and more are discussed in detail in this great resource:

Find the Department of Labor’s Handy FLSA Question and Answer Resource here.

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Standard Severance Agreements May Need to Be Revised

employment contractMy colleagues, Bill Hayden and Anne Dwyer, recently published a legal alert addressing two recent cease-and-desist orders issued by the Securities and Exchange Commission (SEC). The lessons learned from the cease-and-desist orders could impact both publicly and privately held employers who may want to consider if their severance agreements need to be revised.

Legal Alert:  Standard Severance Agreements May Need to Be Revised
by William R. Hayden and Anne E. Dwyer

Many employers offer severance agreements to departing employees which, at least in part, are designed to protect the employer from disclosures of confidential information and from any future claims or recovery by the departing employee. Unfortunately, two recent cease-and-desist orders issued by the Securities and Exchange Commission (SEC), which contained both large monetary penalties and burdensome notice requirements, may require employers, both publicly and privately held, to revise the language that is currently contained in most standard severance agreements.

In less than one week, the SEC issued two cease-and-desist orders against publicly held companies finding that the contents of their standard severance agreements violated Rule 21F-17 of the Dodd-Frank Act, which prohibits any person from taking “any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.”

First, on August 10, 2016, the SEC announced a cease-and-desist order against BlueLinx Holdings, Inc. finding that the confidentiality and waiver provisions contained in its standard employee severance agreements violated Rule 21F-17. Specifically, BlueLinx’s severance agreements contained confidentiality provisions prohibiting employees from disclosing confidential Company information unless compelled by law to do so and only after notifying the Company’s legal department. For example, some of the Company’s severance agreements required the departing employee to confirm that he or she “has not and in the future will not use or disclose to any third party Confidential Information, unless compelled by law and after notice to BlueLinx.”

Further, in 2015, BlueLinx added to its agreements a provision that is found today in many companies’ severance agreements providing:

[N]othing in this Agreement prevents Employee from filing a charge with … the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other administrative agency if applicable law requires that Employee be permitted to do so; however, Employee understands and agrees that Employee is waiving the right to any monetary recovery in connection with any such complaint or charge that Employee may file with an administrative agency.

The SEC found these two provisions unlawfully restricted the ability of departing employees to disclose confidential corporate information and “forced those employees to choose between identifying themselves to the company as whistleblowers or potentially losing their severance pay and benefits.” Further, the agreements “removed the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.” (often referred to as a whistleblower’s “bounty”).

After the SEC instituted legal proceedings against BlueLinx, the Company settled by agreeing to a cease-and-desist order and the payment of a $265,000 fine. In the SEC’s view, the mere presence of the above discussed provisions in severance agreements was enough to warrant such a monetary penalty, in that there is no indication that the Company ever took any steps to enforce those provisions. In addition, BlueLinx was required to agree to include a provision in all future severance agreements assuring former employees that they were not prohibited from filing a charge, communicating or participating in any investigation with government agencies and further assuring the employees that the severance agreement did not prevent the employee from accepting an award for providing information to the government agencies. Even more onerous, BlueLinx was forced to agree to contact all former employees who had signed a severance agreement with the Company over the past five years and inform them of the SEC’s order and that they were not prohibited from providing information to the Commission or accepting a whistleblower award from the Commission (i.e., “bounty”).

Less than one week later, on August 16, 2016, the SEC announced a second cease-and-desist order that included a $340,000 penalty against a California-based health insurance provider, HealthNet, based upon the same alleged violations of Rule 21F-17. HealthNet’s standard severance agreements contained a provision providing:

nothing in this Release precludes Employee from participating in any investigation or proceeding before any federal or state agency or governmental body … however, while Employee may file a charge, provide information, or participate in any investigation or proceeding, by signing this Release, Employee, to the maximum extent permitted by law … waives any right to any individual monetary recovery ….

Again, the SEC found that this provision “directly targeted the SEC’s whistleblower program by removing the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.” In addition to being required to pay a $340,000 fine, HealthNet was also required to agree to contact all former employees who had signed a severance agreement, provide them notice of the SEC’s order, and provide them a statement that HealthNet does not prohibit employees from seeking and obtaining a whistleblower award from the SEC (i.e., “bounty.”). Again, these sanctions were imposed even though it was undisputed that the company had taken no action to enforce these provisions.

While the SEC generally regulates only public employers, the SEC has made it clear that its reasoning in these actions will apply to both private and publicly traded companies. In fact, Rule 21F-17 was specifically designed to encourage employees of both privately and publicly held companies to report possible violations of securities laws.

In summary, in these recent actions, the government held that it is unlawful for severance agreements to contain provisions that:

  1. prohibit the disclosure of confidential company information unless required by law;
  2. prohibit the disclosure of confidential company information without prior notice to the company; and
  3. prohibit the former employee from recovering additional compensation in the form of whistleblower “bounties.”

Considering the large fines ($265,000 and $340,000) and onerous notice requirements compelled by the SEC in these recent actions, both privately and publicly held companies may want to have their severance agreements reviewed in order to decide whether they need revision in light of these recent actions.

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