Emerging Issues

To help our Staffing Clients maintain an edge in the competitive Staffing Industry, we regularly review and analyze new and emerging legal trends and issues facing the industry.  Further, we consult with our Staffing Clients' with respect to the best practices to address these ever changing issues. 

CANNABIS

More American workers are testing positive for drugs than they have in over a decade.  Why does this matter to our Staffing Clients, especially in states with more liberal laws with respect to cannabis use? Simply put, despite the easing legal restrictions at the state and local levels, marijuana is still not legal under Federal law.  Further, most of our Staffing Clients' customers not subject to statutory zero tolerance policies are free to adopt such policies and, in fact, many industry sectors do adopt zero tolerance policies driven mainly by workplace safety concerns.  So, Staffing Companies will likely continue to screen candidates’ drug use for the foreseeable future, albeit in a more laid back and receptive environment with respect to use of marijuana outside of the workplace.  To complicate matters further, the nature and scope of the “legalization” of cannabis use varies widely from jurisdiction to jurisdiction.  The impact of legalized recreational use and medical use are also very different.  As noted above, recreational use can still result in disqualification of a candidate.  Authorized medical use, however, calls into play disability statutes and the issue of reasonable accommodations.

We help our Staffing Clients develop policies to address these issues.  Generally, such policies create awareness and educate both candidates and employees about the legal landscape and the applicable drug screening policies and procedures.  In particular, these policies, at a minimum, include a list of acceptable activities, screening procedures and enforcement provisions.  Finally, we encourage that these policies be communicated regularly to candidates, employees and, yes, to clients as well.

Further, the state-by-state “legalization” of marijuana impacts Staffing Companies’ funding sources.  Marijuana remains a controlled substance by virtue of its listing as a DEA Schedule I drug.  This complicates matters for lenders seeking to fund activities related to the marijuana industry.  As long as marijuana remains a controlled substance, banks insured by the FDIC must disclose any transactions related to its sale to federal regulators. This could result in additional regulatory scrutiny for the bank or financial institution.  Accordingly, most of the largest banks in the U.S. have avoided any dealings with the legal cannabis industry.  We regularly advise our Staffing Clients regarding these complicated financial issues.  

 

PREDICTIVE SCHEDULING OR FAIR WORKWEEK LAWS

An increasing number of states and local governments are passing and implementing “fair workweek” or “predictive scheduling” laws. These laws are intended to afford employees greater predictability, flexibility and control over their work schedules.  The anticipated impact on effected Staffing Companies may be far-reaching.  First, by essentially restricting the use of Staffing Companies, these laws could deny jobs to thousands of temporary and contract workers and eliminate the common “bridge” to permanent employment for such workers. Second, compliance with the ordinance would be extremely difficult for Staffing Companies.  Most of these laws require temporary workers assigned to retail, restaurant, and hospitality clients to be provided with written, good faith estimates of the employee’s work schedule upon hire, written notice of the actual schedule on or before commencement of employment, discrete and relatively short advanced notice of any new schedule, and finally, advanced notice of any proposed changes to a posted work schedule.  Additionally, many of the ordinances require employers to offer work hours to those already employed, thereby lessening the hours offered to contract workers.  These measures would eliminate the workplace flexibility that many temporary workers seek, making already thin applicant pools even less populated.

We regularly advise our Staffing Clients regarding the scope and impact of such laws and provide guidance with respect to legal compliance and other business options. 

DEREGULATION

The Trump administration has been very active in eliminating regulation at the Federal level.  That trend likely will continue in 2020.  In addition, it is very unlikely given the split in Congress that we will see much of anything in terms of new congressional legislation over the next two years. Certainly, the decrease in federal legislation and regulation is a positive development for the Staffing Industry.  However, the impact of this development has been tempered and will continue to be tempered by States and localities, especially so-called “blue states” stepping in to regulate in the absence of Federal regulation.  In particular, States and localities have been active in passing new employment related regulations impacting the Staffing Industry for the past several years.  We have seen new minimum wage laws and ordinances, new paid sick leave ordinances, new healthcare directives, expanding legalization and use of marijuana, new privacy laws and regulations, as well as others in many states and localities.

#METOO

The sweeping changes and notability brought about by the #MeToo movement cannot be understated.  The movement has caused many states and localities to enact new laws which specifically target the eradication of sexual harassment.  Many of these laws require policies and trainings which comply with very specific legal provisions.  Failure to comply could result in not only administrative penalties, but also civil exposure.  However, there may be a positive impact from these regulations – if employers comply with them, employers may have a defense in, and possibly a way out of, a sexual harassment lawsuit.

We expect the movement to continue and only become more pronounced.  We keep our Staffing Clients up to date on these laws and ensure their policies cover what is required.  Also, at least on an annual basis, we encourage our Staffing Clients to conduct trainings for its employees.    

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