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  • North America Legal Update Q2 2019

    Canada Quebec tables draft regulation on personnel placement agencies              Period of service as an independent contractor taken into account in reasonable notice of termination      United States     States Attorney Generals oppose proposed joint employer rule   Agricultural employers open to discrimination claims as joint employers  Guidance for H-1B petitioners on electronic notification requirements      DOL and NLRB declare gig economy workers are independent contractors             Dynamex ABC test for contractor misclassification applies retroactively    Court decision highlights issues around independent contractor background screening               Washington State imposes restrictions on non-competition agreements with employees and contractors         Independent contractor status is not a shield from OSHA               Paid Leave Roundup: Massachusetts Act delayed; D.C. Universal Paid Leave Act has broad reach; Maine introduces paid leave for no reason  Legal Disclaimer: This update is provided solely for the purposes of information and should not be considered legal advice. It is always recommended to seek the advice of qualified legal counsel before taking action.To download a pdf copy of this update, click below: North America Legal Update Q2 20190716 - You do not have permission to view this object. Canada 1.     Quebec tables draft regulation on personnel placement agenciesIn June 2018, amendments made to the Labour Standards Act ("LSA") included additional obligations and responsibilities for personnel placement agencies and temporary foreign worker recruitment agencies (collectively “agencies”). These amendments are intended to come into effect on the date the government adopts a regulation setting out the standards and procedures for giving effect to the amendments to the Labour Standards Act. On April 10, 2019, the Quebec Minister of Labour, Employment and Social Solidarity published a draft "Regulation respecting personnel placement agencies and recruitment agencies for temporary foreign workers" (the "Draft Regulation").The Draft Regulation defines a “personnel placement agency” as a person, partnership or other entity that has at least one activity consisting in offering personnel leasing services by providing employees to a client enterprise to meet its labour needs; and a “temporary foreign workers recruitment agency” as a person, partnership or other entity that has at least one activity consisting in offering services for the recruitment of temporary foreign workers for a client enterprise or in assisting the enterprise in its efforts to recruit such workers.The Draft Regulation proposes to establish a mandatory licensing system for carrying out the activities of an agency. Any person, partnership or other entity wishing to obtain an agency licence must therefore apply for the licence, which is issued by the Commission des normes, de l’équité, de la santé et de la sécurité du travail (the CNESST). The Draft Regulation further provides for the conditions of issuance, renewal and maintenance of each such licence.With respect to the issuance of licenses, in addition to providing the information required by the CNESST, a person wishing to obtain a licence must pay the annual fees, in the amount of CAD 1,780 (USD 1363), which are payable in two equal annual installments, and, in the case of a personnel placement agency, provide a security of CAD 15,000 (USD 11,482). The purpose of the security is to guarantee the payment of unpaid amounts that may be due to an agency employee by the licence holder or a client enterprise, following a judgment or a transaction resulting from a pecuniary complaint filed with the CNESST. The licence holder must make up the security provided, so that it meets the amount of CAD 15,000 (USD 11,482) for the entire term of the licence.Once granted, licenses are valid for a term of two years and may not be transferred. Licenses may be renewed on application to the CNESST at least 60 days before their expiry. The Draft Regulation also enacts new obligations for agencies with respect to their employees when they obtain their licenses. Some of these duties are general ones, such as the mandatory display of a license in their establishments and the indication of licence numbers on every document commonly used, while others relate specifically to agencies of one or the other type.The period for comments from the public on the draft regulation closed June 27, 2019. Although no firm date has been set, it is likely that the Draft Regulation will come into force in the autumn of 2019. However, it may undergo amendments before it is finalised. Further details are provided by Borden Ladner Gervais. 2.      Period of service as an independent contractor taken into account in reasonable notice of terminationIn a decision by a judge of the Ontario Superior Court in Cormier v 1772887 Ontario Limited, it was established that there may be circumstances in which it would be reasonable to consider an employee’s years of service as an independent contractor in calculating his or her common law reasonable notice period.Ms. Cormier worked for the employer as a contractor from 1996 to 2004, at which time she was hired as an employee. Ms. Cormier continued to work for the employer until 2016, when she was terminated without cause. The employer offered Ms. Cormier five weeks’ working notice of termination plus 29 weeks’ pay in lieu of notice. Ms. Cormier refused that offer and brought an action for wrongful dismissal.Ms. Cormier claimed that she was entitled to 24 months’ pay in lieu of reasonable notice of termination. Ms. Cormier argued that between 1996 and 2004 she was a dependent contractor and that those years of service ought to be included in calculating her reasonable notice period. The employer argued that Ms. Cormier was an independent contractor between 1996 and 2004 and that her reasonable notice period ought to be calculated without regard to those years of service.An employee or a dependent contractor who is dismissed without reasonable advance notice of termination is entitled to damages for breach of contract based on the employment income the employee would have earned during the reasonable notice period, less any amounts received in mitigation of the loss. The termination clause in Ms. Cormier’s 2012 employment contract was unenforceable, and, therefore, under the common law, she was entitled to pay in lieu of reasonable notice. The judge found that Ms. Cormier was a dependent contractor between 1996 and 2004 and awarded Ms. Cormier 21 months’ pay in lieu of reasonable notice of termination.However, the judge then went on to state that even if he had found Ms. Cormier was an independent contractor between 1996 and 2004, he still would have included those years of service in calculating her reasonable notice period. He said that “… it would have been wrong in principle to ignore these years of their relationship in determining the reasonable notice period. The court should take all of the circumstances into account and in the immediate case even if I had found Ms. Cormier to be an independent contractor, I would not have ignored those years of their relationship.”This decision suggests that courts will consider the characteristics of each employment relationship in determining whether or not an employee is entitled to pay in lieu of reasonable notice of termination. The lengthy engagement of an individual as an independent contractor could therefore result in a corresponding common law notice period where there is no notice or invalid notice specified in the contract documentation. Employers should review the status of independent contractors on a regular basis to ensure that there is no misclassification as a result of changes in the working relationship over the course of time. United States 1.     States Attorney Generals oppose proposed joint employer ruleIn our North America Legal Update Q1 2019, we reported that the Department of Labor had published a Notice of Proposed Rulemaking on April 9, 2019 to revise and clarify the responsibilities of employers and joint employers under the Fair Labor Standards Act (FLSA). The DOL has not revised its joint employer regulation since 1958.The Department proposes a four-factor test, based on well-established precedent, that would consider whether the potential joint employer actually exercises the power to: Hire or fire the employee; Supervise and control the employee's work schedules or conditions of employment; Determine the employee's rate and method of payment; and Maintain the employee's employment records. On June 25, Attorneys General from 18 states and the District of Columbia sent a letter to US Secretary of Labor Alexander Acosta to oppose the Department of Labor’s proposal to change the interpretation of joint employment. The Attorneys General assert the proposed rule would violate the Administrative Procedure Act, which requires an agency to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Millions of workers would be vulnerable to potential violations of the Fair Labor Standards Act and state laws, according to the letter.“Notably, the proposed rule encourages employers to avoid liability under the law by simply asserting that, although they had the ability to exercise control, they did not in fact exercise that control,” according to the letter.Attorneys General signing the letter were from California, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.On May 13, 2019 the Department announced that the comment period originally set to end on June 10, 2019 was being extended until June 25, 2019. The Department will now consider all 12,816 public comments in developing any final rule. 2.     Agricultural employers open to discrimination claims as joint employersIn February 2019, in EEOC v. Global Horizons, Inc. the 9th Circuit Court of Appeals held that employers who use labor contractors to recruit H-2A workers can be liable under Title VII as a joint employer for non-workplace matters—such as claims for housing, meals, and transportation—even if such matters are contractually delegated to a labor contractor.The case involved two fruit growers in Yakima, Washington, that entered into agreements with Global Horizons, a labor contractor, to obtain temporary workers. Global Horizons recruited and brought workers from Thailand to the United States under the H-2A guest worker program, allowing agricultural employers to hire foreign workers for seasonal and temporary work. Both the growers and Global Horizons provided management, supervision, and oversight at the orchards while Global Horizons agreed to take on the responsibility for the applicable H-2A requirements of providing the workers with housing, meals or cooking facilities, transportation to and from the worksite, and timely wage payment. The growers agreed to compensate the labor contractor for the workers’ wages and benefits and to pay a fee for its services.In response to a complaint from two of the workers, U.S. Equal Employment Opportunity Commission (EEOC) brought an action against the growers and Global Horizons alleging the workers were subjected to poor working conditions, substandard living conditions, and unsafe transportation on the basis of their race and national origin. The EEOC alleged that Mexican workers were not subjected to the same conditions. The growers contended they were not liable as joint employers for the conduct of Global Horizons and filed a motion to dismiss. The lower court ruled that the growers were joint employers of the Thai workers with respect to “workplace matters” (i.e., the working conditions at the orchards) but agreed that they were not joint employers of the workers as to “non-workplace matters” (i.e., housing, meals, and transportation, among other things). The case, therefore, proceeded against the growers only regarding the “workplace matters.”In its review of the case, the 9th Circuit Court of Appeals found that the growers were joint employers and could be liable for Global Horizon’s alleged discriminatory conduct relating to the non-workplace matters if the growers knew or should have known about the company’s conduct and failed to undertake prompt corrective measures within its control.In light of this decision, businesses employing H-2A workers should take prompt action if they become aware of any concerns related to both workplace and non-workplace matters required under the H-2A program even if non-workplace matters, such as housing, meals, and transportation have been delegated to a labor contractor. It is good practice to audit labor suppliers before engaging H-2A workers through a contractor and throughout the term of the contract on a regular basis. 3.     Guidance for H-1B petitioners on electronic notification requirementsThe Immigration and Nationality Act, as amended (INA) and corresponding H-1B regulations require a petitioner using the H-1B program to notify all affected workers of its intent to petition for H-1B workers. Affected workers are those at the same place of employment and in the same occupational classification in which the H-1B workers will be or are employed, including those employed by a third party.This requirement, which is commonly referred to as the notice or posting requirement, informs U.S. workers of the terms of the employment of the nonimmigrant workers, the right of U.S. workers to examine certain documents, and the ability of U.S. workers to file complaints if they believe that violations have occurred. With the rise in the use of electronic notifications the Wage and Hour Division of the Department of Labor issued a Field Assistance Bulletin No. 2019-3 (FAB) on March 15, 2019 reiterating an H-1B petitioner’s obligations when using electronic means to make the requisite notice to all affected employees including those who are employed by a third-party employer.The specific regulations on electronic notice explicitly state that, similar to the hard copy format, notice must be given to “both employees of the H-1B petitioner and employees of another person or entity which owns or operates the place of employment.” 20 C.F.R. 655.734(a)(ii)(B). Electronic notification must be as effective as hard copy posting. If an H-1B petitioner chooses to provide notice via posting in an electronic location (such as an intranet, internal database, or public website), it must ensure that all affected workers, including those employed by a third-party, have access to, and are aware of, the electronic notification.To provide sufficient notice, a petitioner who chooses to electronically notify must make the notification readily available, as a practical matter, to all affected employees. If the H-1B petitioner intends to employ H-1B workers at a third-party worksite, the petitioner’s obligation to post the notice extends to the third-party worksite, regardless of whether the place of employment is owned or operated by the petitioner or by some other person or entity.However, some electronic resources used by H-1B petitioners to communicate the required notice to their own employees may not be known or accessible to affected workers employed by a third-party.Electronic notice is insufficient if posted in an electronic location known to or used by the H-1B petitioner’s own employees, but not known to or used by employees of the third-party. Even if the employees of the third-party can visit an electronic resource, if they do not know to visit the electronic resource, the notification is not readily accessible, to affected workers employed by the third-party.U.S. employers seeking to employ foreign national specialty occupation workers should refer to the FAB for details of the requirements for notifying affected employees of the intention to hire an H-1B worker. 4.     DOL and NLRB declare gig economy workers are independent contractorsOn April 29, 2019, the Department of Labor (DOL) issued an Opinion Letter FLSA2019-6 in response to a request by an unnamed “virtual marketplace” company (VMC) which operates an “on demand” or “sharing” platform directly connecting consumers with “service providers,” offering services, such as transportation, delivery, shopping, moving, cleaning, and household services. The VMC was deemed a “referral service” that does not receive services or have a working relationship with providers. Instead, the DOL determined that the providers did not fit “any traditional paradigm” covered by the FLSA and “as a matter of economic reality,” the providers work for the consumers. The DOL used the FLSA Six-Factors test to analyze the operating model of the VMC.In May 2019, applying their decision in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019) (“SuperShuttle”) the National Labor Relations Board issued an Advice Memorandum declaring that Uber drivers are independent contractors and not employees.The memo, dated April 16, 2019, said the drivers are independent contractors under the NLRB’s recently-adopted SuperShuttle test, because they have “significant entrepreneurial opportunity” while driving for Uber.  The Board based its decision largely on its finding that these drivers had “near complete control of their cars and work schedules, together with freedom to choose log-in locations and to work for competitors of Uber.” The Board further observed that, “on any given day, at any free moment, drivers could decide how best to serve their economic objectives: by fulfilling ride requests through the App, working for a competing ride-share service, or pursuing a different venture altogether.”The SuperShuttle ruling had reversed the NLRB’s own 2014 decision in FedEx Home Delivery, 361 NLRB No. 55 (Sep. 30, 2014) that entrepreneurial opportunity was only one factor to consider in determining whether workers were independent contractors rendering them exempt from coverage under the National Labor Relations Act.Though these decisions represent a significant shift away from the more employee-friendly approach of the DOL and NLRB in the Obama era, they may have limited impact since most misclassification cases are filed under state law. The factors applicable in state laws may be more restrictive particularly those, such as California, which rely on an “ABC” test (see below). States that have passed “marketplace contractor” laws treating service providers on VMC-type platforms as independent contractors, include Arizona, Florida, Indiana, Iowa, Kentucky, Tennessee, Texas, and Utah. 5.     Dynamex ABC test for contractor misclassification applies retroactivelyIn April 2018, California’s Supreme Court shifted the burden of proving independent contractor status onto the employer and stated that a three-factor “ABC” test was the correct test for determining whether a worker was an independent contractor under state wage and hour laws (Dynamex Operations W. v. Super. Ct., Cal., No. S222732, 4/30/18). Under the “ABC” test, the workers are presumed to be employees unless the employer can demonstrate that all three of the following conditions are met:A) the worker is free from the control and direction of the hirer in connection with the performance of the service, both under the contract for the performance of the work and in fact; andB) the worker performs work that is outside the usual course of the hiring entity’s business; andC) the worker is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.Following that decision there was widespread concern that the test made it harder for companies to classify workers as independent contractors and that the test would not only be applied to cases going forward, but also to disputes arising before the new test was enacted. When the California Supreme Court decided Dynamex, a decade-old class action Vazquez v. Jan-Pro Franchising Int'l, Inc., 2019 U.S. App. LEXIS 13237 (9th Cir. May 2, 2019) (“Vazquez”), was already the subject of an appeal before the Ninth Circuit Court of Appeals. The court ordered the parties to brief the effect of Dynamex on the merits of the case and specifically whether Dynamex applied retroactively.On May 2, 2019 the Ninth Circuit confirmed that the test should be applied retroactively citing California’s “general tradition that judicial pronouncements have retroactive effect,” as well as “the emphasis in Dynamex on its holding as a clarification rather than as a departure from established law.” Although Jan-Pro and an amicus raised due process concerns, the court reasoned that applying Dynamex retroactively would be “neither arbitrary nor irrational,” since the wage orders at issue were remedial in nature and meant to be “liberally construed in a manner that services [their] remedial purpose.” The court also cited policy concerns identified in the Dynamex decision and concluded that, “[b]y applying Dynamex retroactively, we ensure that the California Supreme Court’s concerns are respected.”The California Assembly passed Assembly Bill 5 on May 29, which would codify the “ABC” test for independent contractor classification established by the state Supreme Court's 2018 ruling in Dynamex. There is no guarantee the bill will become law, as it still needs to be passed by the Senate. However, as the law stands, Californian employers should review their use of independent contractors in light of Dynamex and Vazquez to ensure they can satisfy the three-factor “ABC” test. If there is any doubt as to whether the employer can provide evidence to satisfy the test, they should take legal advice on the implications of continuing to engage that worker on a self-employed basis.Other states which apply a similar test include Indiana and New Jersey, while Oregon and Washington have pending bills that propose criteria similar to California’s ABC test, according to CNBC. Employers should watch closely the developments of the law relating to misclassification at the state level. 6.     Court decision highlights issues around independent contractor background screeningClass actions have recently focused on the technical requirements of the Fair Credit Reporting Act (FCRA) claiming statutory damages of between USD 100 and USD 1000 for each violation. But a decision in the recent case of Smith v. Mutual of Omaha Insurance Company, No. 4:17-cv-00443-JAJ (S.D. Iowa May 1, 2019) has highlighted how employers can take preventive measures to avoid claims when engaging independent contractors.In this case, the plaintiff filed a FCRA lawsuit challenging the defendant’s “pre-adverse action” process under 15 U.S.C. § 1681b(b)(3).  This requires businesses using consumer reports i.e. background checks “for employment purposes” to provide a copy of the report and summary of the individual’s rights under the FCRA before taking any adverse action “based in whole or in part” on the report.  The plaintiff claimed that he did not obtain a position as an insurance agent based on his background check, and that the company had failed to comply with these pre-adverse action requirements.  The company defended the claim on summary judgment, in part on the basis that the plaintiff was an independent contractor and therefore the prerequisite of “employment purposes” for Section 1681b(b)(3) to apply to the plaintiff was lacking. After considering evidence including the independent contractor agreement, Smith’s background check disclosure and authorization, evidence about discussions regarding the opportunity, and other evidence regarding how the position would function, the court concluded that Smith was an independent contractor and agreed that Section 1681b(b)(3) did not apply.During the proceedings, the plaintiff amended his complaint to claim that if it turned out that he was an independent contractor, and if the court agreed that the FCRA’s employment purposes provisions do not apply to independent contractors, then the company had violated a separate FCRA provision, Section 1681b(f). This section provides that a person shall not use a consumer report unless it is obtained for a purpose that is authorized; and the purpose is certified by a prospective user of the report. The plaintiff alleged that the company had certified to the consumer reporting agency that it would obtain consumer reports only for “employment purposes.”  The plaintiff thus claimed that if the company now asserted that his consumer report was not obtained for “employment purposes” via its independent contractor defense, then the company had violated Section 1681b(f) by obtaining a report for some other purpose for which it had not been certified.At the motion-to-dismiss stage, the court had to take the allegations as true that the company had obtained the plaintiff’s report for a not-certified-to permissible purpose, therefore allowing the plaintiff to proceed with a potential claim under Section 1681b(f).The lesson from this case is that employers should identify the full range of purposes for which they are authorized to obtain background checks in the contract documentation, to provide a defense to technical claims of violation of the FCRA. Littler advises that human resources personnel or in-house counsel with background check compliance expertise should be involved in contract discussions as contractor and contingent workforce screening is a complicated compliance area. 7.     Washington State imposes restrictions on non-competition agreements with employees and contractorsEngrossed Substitute House Bill 1450 (HB 1450), radically alters the law governing non-competition agreements in Washington State with effect from Jan. 1, 2020. The new law applies not only prospectively, but also to “all proceedings commenced” on or after January 1, 2020, “regardless of when the cause of action arose.” HB 1450 imposes restrictions on non-competition covenants with both employees and independent contractors.  A non-competition covenant is defined as every written or oral agreement restraining an employee or independent contractor from engaging in a lawful profession, trade, or business.  However, some types of restriction are not affected by the new law, including non-solicitation agreements and sale-of-business non-competes.Once the law becomes effective, non-competition covenants will be per se “void and unenforceable” against employees earning less than USD100,000 annually from the party seeking to enforce them.  Non-competition covenants with independent contractors are similarly “void and unenforceable” unless the contractor earns at least USD250,000 annually from the party seeking enforcement.  These compensation thresholds will be adjusted for inflation yearly by the Washington State Department of Labor and Industries.Employers must disclose the terms of the non-competition covenant in writing to prospective employees no later than the time the employee accepts an offer of employment. Non-competition covenants entered into after the start of employment must be supported by independent consideration—continued at-will employment is insufficient.  While the law does not define what constitutes “independent consideration,” courts generally hold that consideration can include items such as increased wages, a promotion, a bonus, or a fixed term of employment. The statute creates a presumption that non-competition agreements with a restrictive period extending beyond 18 months after the termination of employment are unreasonable and unenforceable. Choice-of-venue provisions in non-competition agreements that require adjudication of disputes outside of Washington State will be unenforceable if the employee or independent contractor is “Washington-based.”If an employer wishes to enforce a non-competition covenant against an employee terminated as a result of a layoff, the employer must provide compensation equivalent to the employee’s base salary at the time of termination (minus compensation earned through subsequent employment) for the entire period of enforcement.In numerous states throughout the country, legislatures are moving to limit the use and enforcement of non-compete and other restrictive covenant agreements. Two such states, Maryland and Virginia, are seeking to curtail such agreements with regard to low-wage employees. There is also growing bipartisan support for restricting the use of non-competes on a nation-wide level.Employers in Washington State should carefully review their existing non-competition agreements, offer letters, and policies to ensure they comply with HB 1450 before the law takes effect. Littler provides further information about the provision of HB 1450. 8.     Independent contractor status is not a shield from OSHAIn June 2019, the US Department of Labor’s Occupational Safety and Health Administration (OSHA) fined a company employing independent contractors after finding that it knowingly failed to ensure the use of fall protection by workers at their worksites.In December 2018, one of the independent contractors engaged by Purvis Home Improvement, owned by Saco, Maine-based Shawn D. Purvis, died after falling off a roof at a Portland, Maine, job site. He was not wearing a safety harness, according to reports. Purvis faces a total of USD1,792,726 in penalties for egregious willful, repeat and serious workplace safety violations. OSHA has cited Purvis for seven violations since 2006.In April, a Portland grand jury indicted Purvis for manslaughter and workplace manslaughter, charging that repeated violations of OSHA’s fall protection standards caused the contractor’s death. Because control is a factor that is weighted heavily in independent contractor classification cases, companies are hesitant to exert control over their contractors, which was a factor in this case. Thomas Hallett, Purvis’ attorney, said in an email to the Portland Press Herald: “Because Purvis Home Improvement cannot exercise control over how independent contractors do their jobs, it cannot mandate safety protocols,” noting that Purvis does make available safety equipment at all times.In response to this, OSHA Area Director David McGuan, in Augusta, Maine said “Effective fall protection can prevent tragedies like this when an employer ensures the proper use of legally required lifesaving protection. An ongoing refusal to follow the law exposes other employees to potentially fatal or disabling injuries. Employers cannot evade their responsibility to ensure a safe and healthful worksite.”Charles Palmer, a partner with Michael Best and Friedrich LLP, notes companies often say they don’t want to dictate the activities of their contractors because that may destroy independent contractor status. “However, the developing body of law, especially in the case of the individual contractor, suggests that companies that use [independent contractor labor] as part of their product or service provided to their customers have a duty to assure compliance with OSHA requirements,” said Palmer, who leads Michael Best’s workplace safety and health sub-practice. 9.     Paid Leave Roundup: Massachusetts Act delayed; D.C. Universal Paid Leave Act has broad reach; Maine introduces paid leave for no reasonThe Massachusetts Paid Family and Medical Leave Act (PFML) provides eligible workers with paid medical and family leave benefits effective Jan. 1, 2021. Specifically, individuals will be entitled to up to 20 weeks of paid medical leave and 12 weeks of paid family leave per year. The maximum amount of combined family and medical leave an individual may take under the PFML is limited to 26 weeks per year. The benefit amount is based on an employee’s earnings and is capped at $850 weekly.While entitlement to benefits for employees does not begin until 2021, employers are obligated to comply with the funding and notice aspects of the law beginning in 2019. From October 1, 2019, employers are required to determine contribution amounts for their workforces and make employee deductions as applicable. Contributions will be made to the newly created Family and Employment Security Trust Fund to be administered by the state treasurer. The date was delayed from July 1, 2019 to give employers across the Commonwealth more time to prepare their organizations and workforces for PFML.The PFML law requires that the Department adjust the contribution rate to offset the shorter period for collections that will result from the three-month delay. As a result, the total contribution rate has been adjusted from 0.63% of eligible payroll to 0.75% of employee qualifying earnings. This adjustment will ensure that full funding will be in place for the commencement of benefit payments in January 2021. The contribution rate is subject to adjustment on an annual basis.The law permits the contribution to be allocated between the employer and its employees as follows: (a) medical leave contribution (employer must contribute a minimum of 60%, and employees may be required to contribute up to 40%); (b) family leave contribution (employees may be required to contribute up to 100%).All employers, regardless of the number of employees, must remit contributions to the state on behalf of their employees. However, if a business has fewer than 25 employees in Massachusetts, it does not have to remit the 60% portion of the medical leave contribution. The employer must remit 40% of the medical leave contribution and 100% of the family leave contribution, but both of those amounts may be deducted from employee wages.No later than September 30, 2019, the PFML requires employers to post “in a conspicuous place on each of its premises a workplace notice prepared or approved by the Department [of Family and Medical Leave] providing notice of benefits available under this chapter.” The PFML also requires that employers provide a written notice to each employee setting forth information, including an explanation of benefits, contribution amounts, and legal protections. New employees must receive this notice effective as of October 1, 2019. The Department of Family and Medical Leave has announced that all current employees should have received this notice no later than September 30, 2019.For further details of the law, refer to the Mass.gov website.The District of Columbia Universal Paid Leave Act applies to all employers that directly or indirectly employ or exercise control over the terms and conditions of employees working in D.C. and that are required to pay unemployment insurance on behalf of their employees, regardless of whether the employer has a physical location in D.C. The Act provides covered employees with eight weeks of paid parental leave, six weeks of paid family leave, and two weeks of paid personal medical leave."Covered employers" are required to contribute an amount equal to 0.62 percent of the wages of each of their "covered employees" to the Universal Paid Leave Implementation Fund. "Eligible individuals" may then file a claim for paid leave benefits for a "qualifying leave event," with those benefits to be paid out of the Fund. The Act requires employers to start paying into the Fund on July 1, 2019, and employees will be eligible for leave benefits beginning July 1, 2020.A "covered employee" is any employee who spends more than 50 percent of his or her work time working in D.C. for a "covered employer." Thus, those employers that do not have a physical location in D.C. but employ remote workers who perform services for the employer 50 percent or more of the time in D.C., would be required to comply with the Act.An "eligible individual" is an individual who has been a "covered employee" during some or all of the 52 calendar weeks immediately preceding the qualifying event for which paid leave is being taken, or is a self-employed individual who earned self-employment income for work performed primarily in D.C. during some or all of the 52 calendar weeks immediately preceding the qualifying event for which paid leave is being taken and has opted into the paid leave program.Further details of the legislation are provided by Baker Donelson.Unlike other paid family and sick leave laws that have been enacted around the country, Maine’s Act Authorizing Earned Employee Leave L.D. 369 would be the first law to allow employees to use earned paid leave for any purpose, including non-medical personal reasons.Effective January 1, 2021, employers in Maine that employ more than 10 employees for more than 120 days in any calendar year (other than in seasonal employment) will be required to provide employees with one hour of paid leave for every 40 hours worked, up to 40 hours per year. The law does not include any provisions for carryover of unused time into the following year. Although employees will begin to accrue leave at the start of employment, employers are not required to permit use of such leave before the employee has been employed for 120 days during a one-year period.Ogletree Deakins provides further information of the Act.Legal Disclaimer: This update is provided solely for the purposes of information and should not be considered legal advice. It is always recommended to seek the advice of qualified legal counsel before taking action. […]

  • Temp Use of Human Cloud Staffing

    Key Findings: One in twelve temporary workers earn income via the human cloud. Altogether, 8.3% of temporary workers received at least some income from human cloud services in 2018. Growth in use of both consumer-related and business-related human cloud work by temporary workers is likely over the long term, inasmuch as awareness is sure to increase and the percent considering using these services is larger than those using them currently. Consumer-related human cloud services. The vast majority of temporary workers are either not yet familiar with (41%) or are familiar but not interested (43%) in human cloud services primarily serving consumers (e.g. Lyft, Handyman.com, etc.). However, 7% are earning at least some income from them, and 9% are considering using such services within two years. The 7% current usage was roughly comparable to the 7.9% rate reported in the previous year; nonetheless, among those using these services, median share of income earned in this manner increased to 20% from the 10% reported in 2016 and 2017. Business-related human cloud services. Likewise, the vast majority of temporary workers are either not yet familiar with (63%) or are familiar but not interested (27%) in human cloud services primarily serving businesses (e.g. Upwork, Guru, etc.). Three percent are earning at least some income from them, and another 7% are considering using them within two years. The 3% current usage represents a marked decline from the 7.9% usage reported in 2017; although sample sizes were limited, the decline was very robust across sub-categories. Among those using these services, median share of income also declined, to 30%, as compared with the 50% reported in both 2016 and 2017. Popular services for employment. The human cloud companies where temporary workers most commonly found gigs were: Uber, Lyft, Upwork, and a variety of delivery services. Definition of human cloud: An emerging set of work intermediation models that enable work arrangements of various kinds to be established and completed (including payment of workers) entirely through a digital/online platform. Well-known names include Uber, Lyft, Upwork, Freelancer, 99 Designs, and Fiverr. To access the complete report, please select the link below: North America TemporaryWorker Survey 2019 Are temporary workers turning to human cloud 20190714 - You do not have permission to view this object. […]

  • SI Report Webinar - July 2019

    In this webinar topics covered include: US contingent workforce market estimates and features Market attractiveness tool Online job advertising landscape And of course the latest updates on the state of the economy, employment trends and developments in the US staffing industry.Download presentation slides 190709_SIReportWebinar.pdf 3.16 MB Select the play button to begin viewing. […]

  • Financial Results of Staffing Companies

    Key Findings: In the latest fiscal quarter, roughly corresponding to 1Q19, median revenue growth among publicly traded staffing companies doing business in North America was 1.9% y/y, half the 3.8% rate in the previous quarter. Although this represents the ninth consecutive quarter of growth for the group, it also exhibits a three-quarter trend of deceleration off a 9.3% y/y peak in 2Q18. Revenue deceleration was less pronounced when adjusting for acquisitions, divestitures, currency exchange, and in some cases a difference in billing days between quarters. Median adjusted revenue growth was just 0.5% y/y, essentially inline from 0.7% in 4Q18, but well below the 3.9% average median adjusted growth of the prior four quarters. Average adjusted revenue growth among the five companies with more than $1 billion of revenue in 1Q19 was 1.3% y/y (Adecco, Randstad, ManpowerGroup, Kelly Services and Robert Half), compared to 2.5% for the remaining firms. The slight underperformance of the largest firms is partly attributed to lower growth rates in certain European markets. Several companies have noted higher wage inflation since the back half of 2018. Gross margins frequently benefit during these periods. At the median, 1Q19 gross margin expanded by 20 basis points y/y. Despite tepid revenue growth, median net income increased 8.1% y/y. While this represents an uptick from 1.0% y/y growth in the previous quarter, it remains well below the previous four consecutive quarters of 20%+ median net income growth. Slower growth is likely to persist near-term due to difficult comparisons that benefited from tax cuts enacted at the end of 2017. Net income in several cases was impacted by significant one-time events that may not reflect the ongoing operations of these companies. Financial Results of Staffing Companies NA 1Q19 20190709 - You do not have permission to view this object. […]

  • Directory of Suppliers to Staffing Firms 2019 - July Update

    The Directory provides a comprehensive range of solutions and services that staffing firms may require to operate their businesses more efficiently and  effectively. 23 different categories ranging from advisors & consultants to payroll funding and back office technologies. 1,070 vendors spanning over 60 countries globally.   To download the complete report, please select the following link:  Directory of Suppliers to Staffing Firms 2019 - July Update - You do not have permission to view this object. […]

  • Staffing in Kenya

    Kenya had a population of 51.4 million (m) in 2018. A working population of 20.4m of whom 9% are unemployed according to the World Bank plus over 3m who are underemployed. Agriculture makes up the bulk of the informal sector, while only 2.8m Kenyans are employed in the formal sector. Roughly a third of these are in the public sector. An estimated 3 million Kenyan nationals are currently working abroad, a significant increase in recent years. Although the majority migrate to countries in Africa (e.g. Botswana, Ghana, Namibia, Tanzania), a growing number migrate to the Middle East. The major growth in Kenya’s recruitment industry has occurred since the late 1990s, with numbers of (licensed) recruitment firms rising from just five in 1998 to over 700 in 2013, and roughly 1,000 by 2015. In 2015, Kenya had to revoke the licences of 930 agencies and banned its citizens from seeking work in the Middle East after a string of cases detailing abuse, especially of domestic workers. This situation has now eased and the country has instigated a new licencing regime. Roughly 120 firms are now accredited but a large number of companies appear to fall outside the auspices of the scheme. There are also a growing number of job boards who are not licenced.  To download the full report, please click below: Staffing in Kenya 20190605 - You do not have permission to view this object. […]

  • Largest Engineering Staffing Firms in the UK

    The UK engineering staffing market continued to grow in 2018 with market revenue increasing by 4%. We estimate that 9 firms generated at least 100 million in engineering staffing revenue in UK in 2018. The five largest firms control approximately 40% of the market. Please note that we have ranked companies by revenue but this ranking should not be taken to imply that a firm with a higher rank provides a better service or more value to its shareholders.   To download this report, please click on the link below. Largest Engineering Staffing Firms in the UK 20190711 - You do not have permission to view this object. […]

  • Online Job Advertising: 2019 Market Update

    We estimate global online job advertising revenue grew 15% in 2018, reaching $22 billion. Growth has been driven by continued economic expansion (driving increased demand for workers and increasing candidate scarcity), increased mobile phone access and mobile solutions, more differentiated job search products, and more candidate traffic driven by the Google for Jobs API. The largest 50 firms collectively generated a little under $18 billion in revenue in 2018, accounting for 82% of all online job advertising revenue, by our estimates. 2018 was a good year for most of the online job advertising industry with revenue growth being achieved by 45 of the 50 firms assessed in this report. However, the market remains challenging and highly competitive, particularly for traditional job boards (still the predominant model). Pricing pressure is a feature of the market as basic job board functionalities have become commoditized and new business models continue to capture market share. The two largest firms, Linkedin and Recruit, now control almost half (48%) of the market, by our estimates. The report is available below: Online Job Advertising: 2019 Market Update - You do not have permission to view this object. […]

  • Staffing in Taiwan

    Key Findings We estimate that the Taiwanese staffing market was worth $2.5 billion in 2018, an increase of +5% compared with 2017. In 2018 the civilian population aged over 15 was 20.1 million of whom 11.9 million were in the labour force. There were 637,000 temporary or dispatch workers (臨時性或人力派遣工作). In addition, the statistics show 423,000 part-time workers (部分時間 工作), but there may be a degree of double counting. There are roughly 1,300 staffing firms which are a mix of global players and local experts including The Adecco Group, Kelly, ManpowerGroup, Persol and Recruit through its RSG brand. A large part of the business involves the moment of labour across national borders. Mostly from SE Asia to Taiwan or from Taiwan to China. Unlike our usual reports, we have ranked companies based on the rating provided by the regulator, the Workforce Development Agency, due to the lack of revenue data. The complete list can be found from page nine onwards. To download the full report, please click below: Staffing in Taiwan 20190605 - You do not have permission to view this object. […]

  • Online Job Advertising: 2019 Market Update

    We estimate global online job advertising revenue grew 15% in 2018, reaching $22 billion. Growth has been driven by continued economic expansion (driving increased demand for workers and increasing candidate scarcity), increased mobile phone access and mobile solutions, more differentiated job search products, and more candidate traffic driven by the Google for Jobs API. The largest 50 firms collectively generated a little under $18 billion in revenue in 2018, accounting for 82% of all online job advertising revenue, by our estimates. 2018 was a good year for most of the online job advertising industry with revenue growth being achieved by 45 of the 50 firms assessed in this report. However, the market remains challenging and highly competitive, particularly for traditional job boards (still the predominant model). Pricing pressure is a feature of the market as basic job board functionalities have become commoditized and new business models continue to capture market share. The two largest firms, Linkedin and Recruit, now control almost half (48%) of the market, by our estimates. The report is available below: Online Job Advertising: 2019 Market Update - You do not have permission to view this object. […]

  • Largest Direct Hire Firms Globally

    The global direct hire market accounted for $28.1 billion in 2018,  6.3% of the global staffing market.  The Americas and Asia Pacific were the two largest regions for direct hire. The United States was the largest national market in 2018, with 42% of the global market. This report provides a ranking of the 20 largest providers of direct hire services globally, based on revenues generated in 2018. The largest global provider was Page Group, followed by Adecco and Hays. Finally, we also provide an overview of the latest trends, based on data published by the largest publicly-listed providers in this space. We have ranked companies by revenue, according to industry custom, but this ranking should not be taken to imply that a firm with a higher rank provides better service or more value to its shareholders. The full top 20 rankings can be found on page seven. Our definition of direct hire revenue and the methodology for this report can be found on page nine. Revenue figures above represent SIA’s best estimate based on available information at the time of publication. The accuracy of estimates may vary depending on multiple factors, including firms’ willingness to provide or confirm information about their operations. To download a copy of the report, click below: Largest Direct Hire Firms Globally 20190626 - You do not have permission to view this object. […]

  • Results of Listed Staffing Firms in APAC Q1 2019

    Revenue in the reported 39 publicly traded staffing firms in the Asia Pacific region rose by a median of 8.0% during Q1 2019, compared to the same period in 2018. Among the companies included in this report, six reported a decrease in revenue. The median gross margin stood at -0.3% compared to last year. Median net income rose by 8.6%. Due to the varying nature of financial reporting styles across APAC, some companies reported their revenue in only half years and other diverse periods. For more information about each company’s results, please click on the links provided or visit the companies’ websites. To download the full report, please click below: APAC Q1 2019 - You do not have permission to view this object. […]