Insights Archives — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

What to Expect Under the EEOC’s Final Regulation on the Pregnant Workers’ Fairness Act

Published on: April 17, 2024 | by Kathleen M. Connelly

On April 15, 2024, the U.S. Equal Employment Opportunity Commission issued final regulations that clarify the obligation of employers to provide reasonable accommodation to pregnant workers under the Pregnant Workers’ Fairness Act (PWFA) that went into effect in June 2023. While employers should review the final regulations linked here for further details, some highlights from new regulations are discussed below.

The Employer’s Obligations Under the PWFA:

The PWFA requires employers of 15 or more to provide reasonable accommodations “to the known limitations of a qualified employee related to pregnancy, childbirth, or related medical conditions, absent undue hardship.” The regulations specify that employers are prohibited from:

Crisis Management: Safeguards to Protect Against Financial Elder Fraud

Published on: April 15, 2024 | by Elizabeth Engert Manzo

In an era where digital transactions are becoming increasingly prevalent, the mechanisms by which financial institutions inform customers of potential fraudulent activities are under scrutiny. Recently proposed revisions seek not only to bolster security measures but also to ensure that customers are promptly and clearly notified, thus minimizing the risk of financial loss.

Possible Changes to Bank’s Notice of Suspected Fraud Under Review

On the first day of the 2024 New Jersey legislative session, Assembly Bill No. 1832 was introduced and referred to committee. If approved as enacted, A1832 would require financial institutions to release financial records to adult protective services if there is suspected fraud of a vulnerable adult or senior customer. It would also permit adult protective services to release these records to law enforcement, where necessary.

Impact of Artificial Intelligence on Estate Planning Attorneys

Published on: March 18, 2024 | by Anne Marie Robbins and Chris Cardone

Artificial intelligence (AI) is in the beginning stages of a revolution. For the better part of the last century, this technology saw little application outside of data analytics and computer algorithms.

Today, AI can replicate real communication with surprising ease. ChatGPT, for instance, is known for its ability to draft essays and summarize long passages from a book in mere seconds, a boon for many a student. Recently, ChatGPT even passed the uniform bar exam on its first attempt. Which begs the question, will this technology replace estate planning attorneys? If you ask ChatGPT yourself, you might be surprised. We typed “I have a legal question” in the search bar, and nearly instantaneously ChatGPT responded, “Sure, I can try to help. Please keep in mind that I’m not a lawyer, and my responses are not a substitute for professional legal advice.”

Still curious, we pressed on, and asked ChatGPT the following question:

Converting Excess 529 Plan Account Funds to a Roth IRA

Published on: March 18, 2024 | by Chris Cardone

A 529 plan account is a tax-efficient way to save for a child’s or grandchild’s education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. 529 plan accounts have multiple tax advantages, including allowing an individual to contribute up to $18,000 per year, or $36,000 per married couple. These contributions are considered gifts to the beneficiary of the account but are not taxable because they qualify for the so-called “annual exclusion” from taxable gifts. The investments in the 529 plan grow tax-deferred, and withdrawals are not subject to income tax when used for qualified educational expenses.

Considering the high cost of education today, it may seem unlikely that any assets in a 529 plan account would go unused. However, if an account’s beneficiary decides not to attend college, attends a more affordable school, or receives a significant scholarship or financial aid, it is possible there would be funds remaining in the 529 account when the beneficiary’s education is concluded. Withdrawals from 529 accounts that are not used for qualified educational expenses are subject to income tax and excise tax of 10% on the earnings portion of the withdrawals. Certain exceptions to the 10% penalty apply. To avoid the income and excise taxes, account holders have the option to change the beneficiary of the 529 account to an eligible relative of the original beneficiary, such as a sibling, child, or other descendant. Beginning in January of 2024, another option that avoids the income and excise taxes is to roll over the amount remaining in the 529 account to a Roth IRA. Whereas amounts withdrawn from 529 accounts may only be used for qualified educational expenses, withdrawals from Roth IRAs do not have restrictions on their use.

In the Setting Every Community Up for Retirement Enhancement Act 2.0 (“SECURE 2.0”) enacted by Congress at the end of 2022, it is now possible to roll over 529 plan account assets to a Roth IRA in the name of the account beneficiary, free of income and excise taxes.

Revamped COVID Guidance From the CDC Drops 5-Day Isolation Rule

Published on: March 5, 2024 | by Kathleen M. Connelly

Emergency room visits and hospital admissions for COVID-19 are down more than 75%, and deaths are down by more than 90%, from the peak of the Omicron wave in January 2022. As the COVID epidemic moves farther into the horizon, the Centers for Disease Control and Prevention (CDC) has modified its guidance for the period of isolation that must be observed by individuals testing positive for COVID-19.

At the onset of the COVID epidemic in 2020 the CDC issued its isolation guidance calling for 10 days of isolation for persons testing positive for COVID-19, which was reduced to 5 days in 2021. On Friday, March 1, 2024, the CDC issued revised guidance which now says individuals testing positive can return to work and other normal activities if i) the COVID symptoms are improving, and ii) the individual has been fever-free for at least 24-hours without medication. However, the new guidance does not apply to healthcare setting.

In his announcement of the new isolation rules, CDC Director Mandy Cohen stated that the CDC’s revision “reflects the progress we have made in protecting against severe illness form COVID-19.” The CDC also pointed to a recent survey indicating that less than 50% of people with cold or cough symptoms would take an at home test for COVID 19, and less than 10% indicated that they would get tested by a pharmacy or healthcare provider. According to Georges Benjamin, Executive Director of the American Public Health Association, the CDC’s new position is more realistic than asking individuals to isolate for 5 days.

NLRB Finds That Wearing BLM Logo in the Workplace is Protected Concerted Activity

Published on: March 4, 2024 | by Kathleen M. Connelly

In a ruling that could have far reaching implications in both unionized and non-union work environments, the National Labor Relations Board (“NLRB” or “Board”) ruled that Home Depot violated Section 7 of the National Labor Relations Act (NLRA) when it terminated an employee for refusing to remove a BLM logo from his company apron that violated Home Depot’s dress code prohibiting the display of causes or political messages unrelated to the workplace.

Although not the first time the Board has addressed the right of employees to don attire with BLM insignia, the ruling provides insight on the factors the Board will find sufficient to rule that employer dress codes must yield to employees’ expressions of support for social justice movements or other political causes.

The Prior Rulings

Ruling Illustrates the Importance of the “Interactive Process” to Successfully Defend a Failure to Accommodate Claim

Published on: February 22, 2024 | by Kathleen M. Connelly

The duty to provide “reasonable accommodation” to an employee with a disability under the Americans with Disabilities Act (ADA) or the New Jersey Law Against Discrimination (LAD) poses significant challenges and legal risks to employers. Determining when an employee’s request for a workplace accommodation is “reasonable” and thus must be accommodated, verses an “unreasonable” one that can be rejected by the employer, is often the subject of costly legal challenges. A recent decision from the New Jersey Appellate Division shows how employers who implement an ongoing “interactive process” as well as offer reasonable accommodations along the way can successfully defend claims of disability discrimination.

The Facts:

Plaintiff Robin Thomas was employed by the New Jersey Department of Corrections (DOC) as a secretarial assistant, a role requiring interaction with co-workers and access to her unit’s files. In 2000, Thomas was diagnosed with an autoimmune disease that was adversely affected by cold and requested a work area without direct exposure to air conditioning. The DOC accommodated that request.

Learn Your ABC’s: Employer Gets Schooled in Misclassification Case

Published on: January 24, 2024 | by Kathleen M. Connelly

Classifying workers as independent contractors can result in significant cost savings for employers, who are relieved of the obligation to offer company sponsored employee benefits (paid time off, health insurance contributions, etc.), to pay into state-sponsored employee benefit programs (e.g., paid sick leave, temporary disability, unemployment), and comply with other employment laws. However, a recent decision from the New Jersey Superior Court, Appellate Division, illustrates that employers who misclassify workers as independent contractors rather than employees – thereby depriving them of the benefits of employee status – learn a tough lesson when workers challenge their employment status.

The Court Proceedings:

In Rodriguez v. De LaRosa (App. Div. 12/11/23), Barber shop owner Reynaldo De La Rosa hired Jonathan Rodriquez and other immigrants from the Dominican Republic to work six days a week as independent contractor barbers and to reside in housing he owned. Rodriguez ultimately filed suit against De LaRosa in the Special Civil Part (a court with a jurisdictional cap on damages of $15,000) claiming he should have been classified as an employee and as required by New Jersey’s Wage and Hour Law, paid overtime for all hours in excess of 40 hours in the preceding two-year period. After a four-day trial, the lower court agreed that Rodriguez did not meet the requirements for classification as an independent contractor under the “ABC test” used to determine independent contractor status and awarded him $15,000 in unpaid overtime wages.

USDOL Issues Final Rule Restoring the Narrower “Economic Reality” Standard for Independent Contractor Status Under the FLSA

Published on: January 12, 2024 | by Kathleen M. Connelly

Effective March 11, 2024, the U. S. Department of Labor (DOL) will implement its final rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, rescinding the 2021 Trump era Independent Contractor Rule that made it easier for employers to establish independent contractor status. The final rule substantially mirrors the Department’s proposed rule issued in October 2022.

Reaffirmation of the Economic Realities Test:

As noted in the DOL’s accompanying FAQ found here, the final rule “continues to affirm that a worker is not an independent contractor if they are, as matter of economic reality, economically dependent on an employer for work.” The final rule reverts back to the narrower “totality of the circumstances” economic reality test in effect prior to 2021 that applied the following six non-exhaustive factors to analyze employee or independent contractor status:

NJ Attorney General and Commissioner of Labor Put Employers Who Misclassify Employees as Independent Contractors on Notice: We Are Coming After You

Published on: December 21, 2023 | by Kathleen M. Connelly

In a December 11, 2021 press release, New Jersey Attorney General Matthew Plotkin and New Jersey Department of Labor Commissioner Robert Asaro-Angelo announced the filing of the first lawsuit under a 2021 law that enhances the State’s authority to curtail illegal misclassification of workers as independent contractors through actions such as direct suits in the Superior Court, work-stoppage orders and enhanced penalties.

“When employers unlawfully and callously toss their workers into the ‘independent contractor’ category they are not only depriving them of a steady paycheck, they are also stripping them of earned sick leave, workers compensation, minimum wage, and more,” said AG Plotkin. “These are national, profitable corporations with deep pockets who are padding their profits with illegal labor schemes, and they seem to have no plans to stop this kind of behavior.” Labor Commissioner Asaro-Angelo cautioned that companies profiting through misclassification “have been put on notice. We are proud to have the strongest worker protection laws in the country, which also safeguard employers who play by the rules. Misclassifying employees will not be profitable, nor overlooked.”

Under New Jersey law, workers are presumed to be employees unless the employer can establish the three criteria of what is commonly called the “ACBC test”: 1) the worker is largely free from the control or direction of the company over the performance of the work; 2) the type of work being performed by the worker is outside the company’s usual course of business, or is performed outside the company’s place of business; and 3) the worker has their own independent trade, job, profession or business. Treating workers who do not meet these stringent criteria deprives them of the rights and benefits afforded to employees, including minimum wage, overtime, workers compensation benefits, temporary disability benefits, earned sick leave, job protected family leave, equal pay, unemployment payments, and statutory protection against unlawful discrimination.