US v. ENGLAND Key Differences In Employment Law. Join the Discussion! @xperthrusa #XHRLive Have a...

US v. ENGLANDKey Differences In Employment

Law

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21/04/23 3

Nicole TrusoEmployment Attorney (United States)

Emma VennessonEmployment Attorney (England)

Overview

Hiring

Employee entitlements

Wage and hour

Changing terms and conditions

Dismissal

Post-termination

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• Mandatory right to work checks

• Before the employee stars work

• Penalties

◦ fine and potential criminal liability

HiringRight to work

England

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• A Form I-9 must be filled out for all new hires

• The employee must complete Section 1, which includes basis employee information, on or before the first date of hire

• The employer completes Section 2, which requires employee present documentation of work authorization, within 3 business days of the date of hire

• Sanctions for hiring or employing an unauthorized worker range from $375 to $16,000

• There are also various levels of sanctions for improperly completed Form 1-9s

HiringRight to work

United States

April 21, 2023 6

• Vetting must be proportionate

• Typical checks

• Less common checks

• Consent is required in most cases

HiringBackground checks

England

April 21, 2023 7

• Highly unusual in England

• Generally only appropriate where the job will entail a high health and safety risk, e.g. factory workers and drivers

HiringDrug testing

England

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• Drug testing is governed by state law

• Many states impose strict requirements:◦ A written drug testing policy◦ Limited testing circumstances◦ Notice to applicants or employees◦ Opportunity to have testing sample retest

• Developing issues related to drug testing with the recent passage of medical marijuana legislation

HiringDrug testing

United States

April 21, 2023 9

• Medical evaluations at the hiring stage are also not common

• Generally only appropriate where physical attribute or certain level of fitness is required for a job, e.g. construction worker or firefighter

• Take care when taking decision based upon medical evaluation as may be used as basis for disability discrimination claim

• Employee consent is always required for medical evaluation

• Strict requirements must be met if medical information is obtained from the employee’s treating physician

HiringMedical evaluations

England

April 21, 2023 10

• An applicant for employment may not be asked for medical information during the hiring process

• Once an applicant has received a conditional offer of employment, the applicant can be required to undergo a medical evaluation or provide medical information

◦ Does not need to relate to the job◦ Must be required of all employees in the same job category

• Applicants may only be disqualified based on such information if:◦ The reason is job-related and consistent with business necessity, or◦ The applicant poses a significant risk of harm to himself or others

• After an employee is hired, all medical inquiries must be job-related and consistent with business necessity

HiringMedical evaluations

United States

April 21, 2023 11

• Many different laws must be considered with regard to background checks

• Fair Credit Reporting Act (FCRA)

• ADA, Title VII, state laws

HiringBackground checks

United States

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• Employees must have a written statement containing certain minimum terms, including those relating to salary, place of work, holiday and notice

• Must be provided within 2 months of starting employment

• Many employers provide employees with an employment contract containing additional provisions for the company’s benefit, e.g. confidentiality restrictions and post-termination restrictions.

HiringEmployment contracts

England

April 21, 2023 13

• Employment contracts are not required and not common for most employees in the U.S.

• Some executives may have employment contracts that provide benefits upon termination of employment.

• Employees are often required to sign confidentiality agreements, which may also include restrictive covenants and invention assignment provisions.

HiringEmployment contracts

United States

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• Common to include post-termination restrictive covenants in employment contracts of mid-senior level employees

• Covenants are only enforceable if:◦ Protect a legitimate business interest◦ Go no further than necessary to protect that interest

• Duration: ◦ generally no longer than 6 months for non-compete covenants◦ generally no longer than 12 months for non-soliciting and non-poaching covenants

• Unenforceable covenants will not be re-written; courts will blue-pencil

HiringCovenants

England

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• Governed by state law◦ Prohibited in some states except in narrow circumstances◦ States may modify, blue-pencil or completely void the entire agreement

• If enforceable, common to enter into such agreements where employee has access to confidential information or customer contact

• Covenants are enforceable if:◦ Protect a legitimate business interest◦ Go no further than necessary to protect that interest

• Duration: generally no longer than two years

HiringCovenants

United States

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• All employees are entitled to a minimum of 28 days’ holiday each year

• No automatic right to time off on bank holidays although most employers include the bank holidays in the employees’ overall holiday entitlement

• Employers may not pay in lieu of unused statutory holiday except upon termination of employment

Employee entitlementsHolidays

England

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• Subject to certain eligibility criteria, employees who are absent from work due to incapacity are entitled to receive statutory sick pay

• Minimum weekly payment payable for up to 28 weeks in any period of absence due to incapacity

• Employers must make these payments and they cannot be recovered from the government

Employee entitlementsSick pay

England

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• There is no federal mandatory vacation or sick pay entitlement

• Vacation and sick pay is governed by an employer’s policies◦ Policies must be carefully drafted and followed

• Some states prohibit use-it-or-lose-it vacation policies

• Certain cities and the state of California have enacted sick pay requirements

Employee entitlementsHoliday and sick pay

United States

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• Maternity leave◦ Up to 52 weeks regardless of length of service◦ Statutory maternity pay at the higher of 90% or fixed GBP amount prescribed by law

for first six weeks, fixed GBP amount per week for the next 33 weeks, last 13 weeks unpaid

• Paternity leave◦ Two weeks for employees with at least 26 weeks’ service◦ Statutory paternity pay at the lower of 90% or fixed GBP amount prescribed by law

• Shared parental leave – new scheme for babies born after 5 April 2015 Scheme allows an eligible mother to choose to end her maternity leave and the other

eligible parent to take the remainder as shared parental leave up to a maximum of 50 weeks

Shared parental leave pay at the lower of 90% or fixed GBP amount prescribed by law up to a maximum of 37 weeks

Employee entitlementsFamily rights

England

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• Family Medical Leave Act◦ 12 weeks of unpaid leave◦ Certain circumstances, including birth or adoption of a child◦ Employee must:

▪ Have worked for employer for at least 12 months

▪ Have worked 1,250 hours in past 12 months

▪ Work at a facility with 50 or more employees within a 75-mile radius

• Many states have additional family leave entitlements

Employee entitlementsFamily rights

United States

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• Regulations require that employees must not work more than 48 hours per week

• Employers must keep records of hours worked

• Employees can-opt out of these regulations

◦ common to include an opt-out clause in contracts for mid-senior level employees

Wage and hourWorking time

England

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• There is a government prescribed minimum wage that applies to all employees ◦ Usually increases year on year

• There is no automatic right to overtime pay under English law

• Generally, an employee will only be entitled to overtime pay if it is expressly stated in his/her employment contract

Wage and hourMinimum wage and overtime pay

England

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• There is no cap on working hours under federal law

• Certain states may require a day of rest per week

• Certain employees are exempt from minimum wage and overtime requirements

• Employers do not need to keep records of work hours for exempt employees

Wage and hourWorking time

United States

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• Certain employees are exempt from minimum wage and overtime requirements

• Exempt employees must be paid on a salary basis and meet certain duty requirements

• Categories of duties:◦ Professional◦ Executive◦ Administrative◦ Outside sales◦ Computer professionals

Wage and hourMinimum wage and overtime pay

United States

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• Non-exempt employees are entitled to overtime at a rate of 1 ½ times their regular rate for hours worked in excess of 40 hours in a week

• Some states have daily overtime requirements or additional premiums for certain hours worked

• Exempt employees are not entitled to overtime

Wage and hourMinimum wage and overtime pay

United States

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• Changes to terms and conditions can only be made where:◦ the contract allows for changes to be made - limited circumstances when this can be

relied upon, or◦ the employee’s consent is obtained

• Obtaining consent will generally involve:• Consulting with the employee• Offering the employee an incentive to accept the changes

• Where possible, consent should be in writing

Changing terms and conditions

England

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If the employee does not consent, the employer has the following options:

1. Dismiss and re-engage on new terms: very risky

2. Impose changes unilaterally: very risky

3. Choose not to implement the changes: will not achieve desired outcome

By far the safest course of action is to consult with the employees to obtain his/her written consent

Changing terms and conditions

England

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• At-will employment

• Cannot be discriminatory, retaliatory or motivated by any other unlawful reason

Changing terms and conditions

United States

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•Need to consider:◦ contractual rights (in particular notice period)

◦ statutory rights (in particular unfair dismissal and discrimination)

◦ reason for dismissal

◦ process for dismissal

Dismissal

England

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Dismissal

England

April 21, 2023 31

Conduct

Capability

Redundancy

Statutory restriction

Some other substantial reason

Fair Reason

Fair Process

•Depends on the reason for dismissal but generally it will involve (as a minimum):

Consultation/investigation Formal meeting to which employee can be accompanied Outcome in writing Right of appeal

Dismissal

England

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• At-will employment

• Employment contracts may specify terms on which employment may be terminated

• Cannot be discriminatory, retaliatory, or for any other unlawful reason

• Treat similarly-situated individuals similarly

Dismissal

United States

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• No required process for terminating an individual employee in the U.S.

• Recommended process similar to that required in England to defend claims of unlawful treatment

Dismissal

United States

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• Unfair dismissal

◦ Must have at least two years’ service

◦ Will succeed if employer fails to prove that it had a fair reason and followed a fair process

◦ Compensation is currently capped at GBP 92,585 (but usually increases year on year)

Post-terminationKey claims

England

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• Discrimination

• Protected characteristics: Sex, age, race (including nationality), religion or

belief, disability, sexual orientation, gender reassignment, marital status,

pregnancy and maternity

• Covers direct and indirect discrimination, harassment and victimisation

(similar to US concept of retaliation)

• No minimum service required

• Compensation is uncapped

Post-terminationKey claims

England

April 21, 2023 36

• Discrimination: protected characteristics under federal law are age, disability, sex, national origin, race, color, religion, pregnancy, and genetic information. State laws may include other protected characteristics, such as sexual orientation.

• Harassment: must be based on a protected characteristic.

• Retaliation: an adverse action is taken because an employee makes a complaint of discrimination or participated in an employment discrimination proceeding.

• Wage and Hour: failure to pay overtime, improper classifications of exempt workers, improper classification of independent contractors.

• FMLA: common claims include failure to provide the required leave or retaliation for an employee taking leave.

Post-terminationKey claims

United States

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• Most claims are brought in the Employment Tribunal

• Employee must notify the employment conciliation service of his/her intention to bring a claim

• Claimant must pay a fee to bring a claim and a further fee to proceed to hearing

• Common for claimants to represent themselves in the Employment Tribunal

Post-terminationBringing a claim

England

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• Federal claims of discrimination, harassment, retaliation and failure to accommodate must first be filed with the EEOC

◦ State law may have similar requirements

• Common for employees to be unrepresented at this stage

• EEOC or state agency will make a finding and issue a right to sue notice

• No requirement that claims for whistleblowing, wage and hour violations, FMLA or breach of contract be brought to an agency before filing a lawsuit

Post-terminationBringing a claim

United States

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• Employees can only waive statutory claims by entering into a settlement agreement

• Typically, settlement agreement is in return for a compensatory payment

• Settlement agreements must satisfy certain statutory conditions, including the employee receiving independent legal advice on the terms and effect of the agreement

• Employer often makes a contribution towards the cost of the employee obtaining such advice

Post-terminationSettling a claim

England

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• Employees can only waive statutory claims by signing a release of claims

• Typically, release is in return for a compensatory payment

• Waivers of federal age discrimination must meet certain requirements

• Certain claims may not be waived without court approval

• State laws may impose additional waiver requirements

Post-terminationSettling a claim

United States

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Questions?

April 21, 2023 42

Conclusion

April 21, 2023 43

Emma Vennesson

Employment Attorney (England)

Tel: +44 (0)20 7450 4562

Email: emma.vennesson@FaegreBD.com

Nicole Truso

Employment Attorney (United States)

Tel: +1 612 766 8445

Email: nicole.truso@FaegreBD.com

Presenters

April 21, 2023 44

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