Perspectives

As we approach 2025, employers face a host of new legislative changes that could significantly impact workplace policies, practices, and budgets. Staying ahead of these changes is not just about avoiding penalties-it’s about fostering a compliant, inclusive, and future-ready workplace. Below are five key areas employers should focus on, along with insights into how they can prepare effectively.

Stay Ahead of New Poster Requirements

Mandatory workplace posters are a simple but crucial compliance requirement. With changes in federal and state laws, updated posters often reflect new employee rights and employer obligations. Employers should monitor for updates to ensure their postings are current. Noncompliance can lead to fines, not to mention the risk of employee claims stemming from lack of information.

Be Ready for Even More Pay Transparency

Pay transparency laws are expanding, with states requiring employers to disclose salary ranges in job postings, promotions, and even during annual reviews. These laws aim to close wage gaps but also add layers of complexity to hiring and compensation strategies. Employers need to evaluate their pay structures, ensure consistent practices, and prepare for increased scrutiny.

Keep an Eye on Emerging Paid Leave Laws

From parental leave to paid sick leave, state and local governments continue to introduce new paid leave laws. These laws not only affect policy creation but also payroll systems and employee handbooks. Employers should stay updated on new mandates and consider how to balance compliance with operational needs.

Plan for Big Minimum Wage Hikes

Minimum wage increases are sweeping the country, with some states and cities enacting annual adjustments tied to inflation. These changes can significantly impact payroll budgets, especially for businesses with large hourly workforces. Employers should strategize how to mitigate the financial impact, whether through workforce planning, price adjustments, or operational efficiencies.

Create Clear Policies for AI in the Workplace

As artificial intelligence (AI) tools become more prevalent in hiring, performance management, and operations, employers must establish clear policies to address their ethical and legal use. Laws surrounding AI in employment are emerging, particularly around bias, data privacy, and employee monitoring. Employers should proactively set policies that balance innovation with fairness.

The Importance of Partnering with Legal Experts

Navigating these legislative changes is no small feat. The nuances of new laws, the pace of change, and the potential for penalties make it essential to work with trusted legal counsel.

Partnering with experts helps employers:

• Interpret and implement laws correctly.
• Develop compliant policies tailored to their industry workforce.
• Avoid costly litigation by identifying and addressing risks proactively.

Final Thoughts

2025 promises to be a transformative year for workplace legislation, but with the right preparation, employers can turn compliance challenges into opportunities. By staying informed and seeking expert guidance, businesses can not only meet legal obligations but also build workplaces that attract and retain top talent.

If you’re looking for support to navigate these changes, reach out to our team at WFJ. Our legal experts are here to help you stay ahead and compliant in the ever-changing employment landscape.

The American’s with Disabilities Act (“ADA”) requires employers to provide an employee with a disability with a reasonable accommodation to allow the employee to perform the essential functions of the job. The obvious question then becomes…what is a reasonable accommodation? This question frequently leaves employers feeling stuck and struggling to identify a reasonable accommodation. However, the Job Accommodation Network (“JAN”) is a great resource for employers. JAN’s website–AskJAN.org–offers creative and effective accommodations for employees with disabilities. JAN’s one objective is to find and share effective workplace accommodation solutions to employers to allow employees to get back to work.

JAN’s website now offers a search tool call the “Situations and Solutions Finder” that gives employers more than 700 accommodation ideas to offer employees with disabilities. The ideas included in the Situations and Solutions Finder tool are real-world examples of accommodations that employers have given their employees. The Situations and Solutions Finder tool lets employers search for accommodation scenarios by filtering the search results by disability, limitation, and/or occupation. For example, if you search “Sleeping/Staying Awake” in the “Limitations” filter, you will see examples of how an employer provided an employee with sleep apnea a small device called the Doze Alert that fit in the employee’s ear and made a noise whenever the employee’s head started to drop forward at work, or how offering a standing desk for an employee with narcolepsy may be a reasonable accommodation for the employee.

The Situations and Solutions Finder tool is a helpful resource employers can use to satisfy their obligations under the ADA. The ADA requires employers to engage in the “interactive process” when an employee requests an accommodation or when the employer knows the employee has a disability and needs accommodation. The interactive process is a fancy legal phrase that simply means the employer and employee must engage in an informal discussion to discuss the employee’s work limitations caused by the disability and what reasonable accommodation, if any, will allow the employee to effectively perform the essential functions of the employee’s job. 

Employers often think there is no reasonable accommodation it can offer an employee.

When employers are stuck in finding a reasonable accommodation, the Situations and Solutions tool is a great resource to turn to. Remember, a reasonable accommodation does not mean the “best” accommodation or the accommodation the employee prefers. Rather, a reasonable accommodation means the accommodation allows the employee to effectively perform the essential functions of the job. 

Navigating the complexities of reasonable accommodations under the ADA can be challenging for employers, but resources like JAN and its Situations and Solutions Finder tool can make the process more manageable. However, ensuring your organization’s policies align with ADA requirements and that your HR professionals and leaders are well-versed in the latest tools and strategies is critical to compliance and fostering an inclusive workplace. Don’t leave these important matters to chance. Consult with an experienced attorney to review your policies, provide tailored guidance, and deliver training to your team. Together, we can ensure your organization is prepared to meet its obligations and support employees effectively.

A well-structured performance management process is a vital tool for employers. Not only does it help align individual contributions with organizational goals, but it also boosts employee engagement, productivity, and long-term success. Here’s a guide for employers on crafting a performance management strategy that not only drives performance but also fosters a fair, supportive workplace.

Key Elements of an Effective Performance Management Process

1. Continuous Performance Development: Performance management is not a one-time event; it’s a continuous cycle of identifying, measuring, and developing employee performance. By consistently communicating expectations and offering opportunities for improvement, employers can create a culture of transparency and fairness.
   • Open Communication: Effective performance management starts from the hiring stage. Clearly communicate job descriptions, work rules, and performance standards. This sets the stage for employees to understand what is expected of them.
   • Timely Feedback: Provide employees with regular, constructive feedback. Don’t wait until a formal review; let them know where they stand and offer guidance on how to meet performance standards.
   • Documentation: Keep detailed notes of all discussions. Document the date, people involved, and a summary of the conversation. For instance, “On May 15, I advised Frank that his error rate for processing claims is 5%, which is above the acceptable range. We discussed strategies for improvement.”
2. Aligning Individual Performance with Organizational Goals: An effective process ensures that each employee’s performance aligns with the larger organizational objectives. This fosters a sense of purpose and accountability, empowering employees to understand how their role contributes to the company’s success.
   • Establish Clear Goals: Set measurable, achievable goals that align with the company’s mission. Employees who understand how their goals impact the organization are more likely to feel engaged and motivated.
   • Reduce Legal Risk: When employees are notified of performance issues before termination, they are less likely to file claims. Should a claim arise, written warnings are invaluable for demonstrating that the employer’s actions were justified.
   • Formal Evaluations and Continuous Review: Human Resources (HR) plays critical role in ensuring consistent and fair treatment. HR can review managerial decisions to confirm that they are aligned with the company’s policies and have been handled consistently across similar situations.

Key Components of a Performance Management System

1. Goal Setting: Setting clear and realistic goals is the first step in aligning performance with expectations. These goals provide a roadmap for employees, offering clarity on what they should achieve. When employees are aware of their targets, they are more likely to contribute effectively.
2. Continuous Feedback: Feedback shouldn’t be reserved for annual reviews. Regular feedback-both positive and corrective- helps employees stay on track and feel valued. It’s essential that this feedback is well-documented and timely.
3. Performance Appraisals: Conduct formal evaluations to assess employee’s achievements and areas for improvement. Performance appraisals provide an opportunity to discuss progress, reinforce goals, and address any concerns. Remember, consistency is crucial-similar performance issues should be addressed in a similar manner.
4. Development Plans: Growth opportunities keep employees engaged and motivated. Creating development plans for employees, including training, skill-building, or career advancement opportunities, can enhance loyalty and performance.

Compliance and Legal Protections

An effective performance management process is also a valuable asset for legal compliance. Regular documentation, written warnings, and clear communication can shield employers from potential legal issues. Here are some tips for maintaining a legally compliant performance management system:

• Keep Records: Ensure all performance-related documentation is securely stored in the employee’s personnel file. Notes from 1:1 meetings should be kept in a manager file, and electronic communications should be professional, as they may be discoverable in a lawsuit.
• Involve HR: HR provides an independent review of disciplinary actions, ensuring that they are fair and consistent with company policy.

Partnering with Legal and HR Professionals

Navigating performance management can be challenging, especially when disciplinary action or termination is involved. To manage this process compliantly, work with trusted legal counsel and HR professionals. These experts can guide you in implementing performance management strategies that not only improve productivity but also help you minimize legal risks, fostering a productive and legally sound work environment.

Partial-day absences for exempt employees can create confusion for employers. The Fair Labor Standards Act (FLSA) has strict rules on salary deductions, and understanding these rules is essential to avoid costly compliance issues. Let’s examine a common scenario to highlight the right approach for managing partial-day absences in a compliant way.

Case Study: Partial-Day Absence Deduction

Scenario: Maria, an exempt employee, takes a half day off for a medical appointment. Her employer deducts four hours of pay from her weekly salary to account for this absence.

Impact: This deduction reduces Maria’s salary based on the hours worked, which is a violation of the FLSA. Exempt employees, under the FLSA, must receive their full salary for any week in which they perform any work, regardless of hours worked, with limited exceptions.

Correct Approach: Maria should receive her full weekly salary despite her partial-day absence. If her employer has a Paid Time Off (PTO) policy, they are permitted to deduct the four hours from her PTO balance instead. If Maria’s PTO is exhausted, her salary should still remain unaffected by the absence.

Key Takeaways for Employers and HR Professionals 

• Understand the FLSA Rules on Salary Deductions for Exempt Employees

Exempt employees are generally entitled to their full weekly salary if they work any part of the week, with very limited exceptions. Partial-day deductions from an exempt employee’s salary are typically prohibited.

• Implement a Clear PTO Policy

A well-defined Paid Time Off policy allows employers to manage partial-day absences in compliance with FLSA guidelines. Employers can deduct partial-day absences from an exempt employee’s PTO balance without affecting their salary.

• Avoid Salary Deductions After PTO Exhaustion

If an exempt employee has used up all available PTO, you still cannot reduce their salary for a partial-day absence. It’s important to communicate this rule clearly to managers and payroll teams to prevent inadvertent violations.

• Train Supervisors and Payroll Staff

Ensure that your HR, payroll, and supervisory staff understand how to handle partial-day absences for exempt employees. Training them on these guidelines can help prevent misunderstandings that lead to compliance issues.

Applying This Lesson to Your Business

Consider conducting a review of your PTO policies and payroll practices to confirm compliance with FLSA standards. Are partial-day absences being managed correctly for exempt employees? Do supervisors and payroll staff know the rules and understand the correct procedures? Making adjustments now can protect your business from potential penalties down the line.

Consult Legal Counsel to Ensure Compliance

Handling partial-day absences for exempt employees requires a clear understanding of FLSA rules and your own company’s policies. To ensure full compliance, consult with experienced legal counsel who can review your policies and help you implement best practices. Reach out to our team to discuss how we can assist you in navigating complex employment laws and maintaining compliant, fair practices in your workplace.

The National Labor Relations Board’s (NLRB) General Counsel, Jennifer Abruzzo, recently issued a memo declaring that many stay-or-play provisions in employment contracts, which often take the form of Training Repayment Agreement Provisions (TRAPs), likely violate workers’ Section 7 rights under the National Labor Relations Act (NLRA). These provisions, designed to recoup costs like training or sign-on bonuses if an employee leaves their job within a specified period, have long been used by companies- but are now under heightened scrutiny.

Why Stay-or-Pay Provisions Violate Section 7 Rights

At the heart of the issues is the way these provisions restrict employee mobility. TRAPs make it financially difficult for employees to resign, effectively coercing them into staying in roles they might otherwise leave. This can discourage employees from engaging in activities protected under Section 7, such as organizing, advocating for improved working conditions, or seeking new employment.

The NLRB’s General Counsel argues that these provisions interfere with worker’s rights by increasing the fear of job loss if they engage in protected concerted activities. Employees might be reluctant to quit or challenge workplace conditions if doing so would trigger a significant financial penalty, making it harder for them to exercise their legal rights.

Types of Stay-or-Pay Agreements Covered

The memo covers a wide range of provisions beyond traditional TRAPs, including:

• Educational reimbursement or repayment agreements
• Quit fees or liquidated damages clauses
• Sign-on bonuses or relocation stipends tied to a mandatory stay period

These provisions typically require employees to pay back costs or face penalties if they leave their job voluntarily or are terminated for reasons other than cause within a certain period.

What is Still Permissible?

The NLRB memo does not ban all forms of stay-or-pay agreements. Employers can still use repayment provisions, but they must be narrowly tailored to avoid interfering with Section 7 rights. Specifically, agreements are more likely to be considered lawful if they meet the following criteria:

1. Voluntarily Entered: Employees must freely choose to enter the agreement, with no undue financial or employment consequences if they decline. For instance, repayment terms tied to optional training or benefits, like elective educational opportunities, are generally permissible.
2. Reasonable and Specific Repayment Amount: The repayment amount must reflect the actual cost to the employer for the benefit provided. If the amount is higher than the actual cost, the provision is likely intended to restrict employee mobility, making it unlawful. Further, the amount of the repayment must be clearly communicated to the employee at the time the agreement is entered into.
3. Reasonable Stay Period: The length o f the required stay should be proportional to the benefit. For example, if the employer provides a costly relocation stipend, the stay period might reasonably be longer than than it is for less expensive benefits, like a sign-on bonus.
4. No Repayment if Terminated with Cause: Employees should not be required to repay amounts if they are terminated without cause. Otherwise, they might fear engaging in protected activities, worrying they could be fired and forced to pay.

60-Day Deadline to Modify Nonconforming Agreements

Employers currently using TRAPs or other stay-or-pay provisions should note that they have a 60-day window from the memo’s issuance to modify any nonconforming agreements. This essentially creates a December, 6, 2024, deadline to comply. Failure to do so could result in enforcement action by the NLRB, including the rescission of the provisions and potential financial liability for any financial harm caused to employees. It is critical for HR professionals and management to promptly review and revise any existing agreements to ensure compliance with the new guidance.

What this Means for Employers

Employers should carefully review their contracts and policies involving TRAPs or other stay-or-pay provisions. While the goal of retaining talent is valid, these provisions cannot come at at the cost of violating worker’s rights. HR teams and company management should ensure that any stay-or-pay provisions comply with the criteria stated above. Businesses should take note of these developments and ensure their policies are compliant within the 60-day window, focusing on creating retention strategies that respect employees’ legal rights and promote a healthy, motived workforce.

In light of these developments, it’s essential for employers to stay ahead of compliance issues by reviewing their stay-or-pay provisions and ensuring they align with the NLRB’s guidance. By taking proactive steps to modify agreements and protect workers’ rights, businesses can mitigate risks and foster a positive workplace culture. For tailored advice and support in navigating these changes, we recommend reaching out to your trusted legal advisor or contacting the Employment and Labor team at Wagner, Falconer & Judd to ensure your policies are fully compliant and designed to protect both your company and its employees.

Employers have a duty to engage in the interactive process when an employee requests accommodations for a disability. This collaborative process ensures that reasonable accommodations are provided, allowing employees to perform their job effectively.

Steps in the Interactive Process:

1. Acknowledge the Request

When an employee requests an accommodation for a disability, the employer must respond promptly. This step is critical not only to comply with the Americans with Disabilities Act (ADA) but also to show the employee that their request is taken seriously.

• Best Practices: Employers should have clear procedures in place for handling accommodation requests. This includes training managers and HR staff on recognizing requests, even if they are informal or don’t explicitly use the term “accommodation”. It is vital to avoid unnecessary delays, as failing to respond in a timely manner can be seen as a violation of ADA requirements.
• Legal Implications: If an employer ignores or delays a response, it may lead to claims of discrimination or non-compliance under the ADA.

2. Gather Information

Once the request has been acknowledged, the employer must gather relevant information to understand the employee’s disability and the type of accommodation needed. This step often involves open dialogue with the employee to better understand their specific limitations and job requirements.

• Best Practices: Ask open-ended questions to fully understand the employee’s situation, while being mindful of privacy and confidentiality. Involving HR, supervisors, or external experts, such as medical professionals, may help in identifying appropriate accommodations.
• Legal Considerations: Employers may request documentation about the employee’s disability from a healthcare provider, but this should be limited to confirming the need for accommodation, not an invasive inquiry into the individual’s medical condition.

3. Explore Accommodation Options

After gathering information, the employer should research and evaluate potential accommodations. Under the ADA, employers are not required to provide the exact accommodation the employee requests, but they must consider reasonable alternatives that allow the employee to perform their essential job functions.

• Best Practices: Collaborate with the employee to brainstorm accommodation options that work for both parties. Common accommodations might include modifying work schedules, restructuring job duties, or providing assistive technologies.
• Reasonableness Standard: Employers should keep in mind that accommodations are considered “reasonable” if they don’t create an undue hardship for the business. Factors like the cost of accommodation, the size of the business, and its overall resources are all considered in determining undue hardship.

4. Implement Accommodations

Once an agreement on the appropriate accommodation is reached, it’s time to implement it. This may involve making physical adjustments to the workplace, providing new equipment, or altering work schedules or duties.

Best Practices: Ensure all stakeholders, including the employee’s supervisors, are informed of the accommodation so it can be integrated smoothly. It’s important to document the accommodation process and provide any necessary training or support for the employee to effectively use the accommodation.

Potential Challenges: Sometimes accommodations require adjustments to work processes, which may cause initial disruption. Clear communication is key to minimizing confusion or frustration from both the accommodated employee and the broader team.

5. Monitor and Evaluate

After accommodations are implemented, employers must continue to monitor their effectiveness. Disabilities and job demands may evolve over time, making it crucial to check in with the employee regularly to ensure the accommodation remains suitable.

Best Practices: Set regular follow-up meetings to review how the accommodation is working and address any concerns or adjustments that may be needed. Keep communication open so that the employee feels comfortable discussing if their needs change.

Documentation: It is important to document these evaluations and any changes to the accommodation to protect the company in case of future disputes or claims of non-compliance.

By following these steps, employers can not only support employees with disabilities but also demonstrate a commitment to an inclusive and compliant workplace. The interactive process should be seen as a continual dialogue between the employer and employee, fostering collaboration to find effective solutions. Moreover, compliance with the ADA protects businesses from legal risks while promoting a positive work environment that values diversity and equal opportunity.

Developing a Robust Compliance Program Can Protect from Litigation from Internal Sources

Developing and maintaining a robust compliance program is critical for businesses to protect themselves from potential litigation arising from internal sources, such as employees or management. Understanding the importance of a comprehensive compliance program is essential to safeguarding a business’ financial and legal interests, ensuring that operations are conducted in accordance with relevant laws and regulations.

The Role of a Compliance Program

A compliance program is a structured set of policies, procedures, and practices designed to ensure that companies and their employees adhere to legal and ethical standards. A robust compliance program serves as a first line of defense against internal risks by promoting a culture of accountability and transparency within the organization. It helps prevent misconduct, detect violations early, and respond effectively to any issues that arise, thereby reducing the likelihood of litigation.

Key Components of a Robust Compliance Program

1. Clear Policies and Procedures: The foundation of any compliance program is a set of well-defined policies and procedures that outline the company’s expectations for ethical behavior and legal compliance. These should cover a wide range of areas, including workplace safety, anti-discrimination, harassment prevention, data privacy, and financial reporting. Policies should be easily accessible to all employees, written in clear language, and regularly updated to reflect changes in laws or business practices.
2. Training and Education: Regular training programs are essential to ensure that employees understand their responsibilities under the compliance program. This includes not only initial onboarding training but also ongoing education on topics such as regulatory updates, ethical conduct, and specific risks relevant to the company’s operations. Training should be tailored to different roles within the organization, ensuring that all employees, from front-line workers to senior management, are equipped to comply with applicable laws and policies.
3. Internal Reporting Mechanisms: A key aspect of a compliance program is the establishment of effective internal reporting mechanisms. Employees should have a clear and confidential way to report concerns or potential violations without fear of retaliation. This can include anonymous hotlines, secure online reporting tools, or direct access to compliance officers. Encouraging employees to report issues internally allows the organization to address problems early, before they escalate into legal disputes.
4. Monitoring and Auditing: Regular monitoring and auditing of compliance activities are crucial for detecting potential issues and ensuring that the program is being implemented effectively. This includes conducting internal audits of financial transactions, reviewing adherence to safety protocols, and assessing the effectiveness of training programs. Audits should be conducted by independent personnel or external experts to ensure objectivity and thoroughness.
5. Enforcement and Discipline: A robust compliance program must include clear enforcement mechanisms for dealing with violations. This means having a consistent and fair disciplinary process in place that holds employees accountable for misconduct. Disciplinary actions should be well-documented and applied uniformly across the organization to prevent claims of unfair treatment or discrimination, which can lead to litigation.
6. Leadership Commitment: The success of a compliance program depends heavily on the commitment of the organization’s leadership. Senior management must lead by example, demonstrating a strong commitment to ethical conduct and compliance with laws and regulations. This includes allocating sufficient resources to the compliance program, regularly communicating its importance to employees, and actively participating in compliance initiatives.

Benefits of a Robust Compliance Program

Implementing a comprehensive compliance program offers several key benefits that can protect companies from internal litigation:

• Litigation Prevention: By proactively addressing potential issues and promoting a culture of compliance, companies can prevent internal disputes from escalating into costly litigation. Employees are more likely to resolve concerns internally if they trust that the organization takes compliance seriously.
• Legal and Financial Protection: A strong compliance program helps ensure that everything operates within the bounds of the law, reducing the risk of legal violations that could result in fines, penalties, or lawsuits. This not only protects the company’s finances but also its reputation.
• Improved Employee Morale and Retention: A workplace culture that prioritizes ethical behavior and compliance fosters a positive work environment, leading to higher employee morale and retention. Employees who feel valued and respected are less likely to engage in misconduct or file lawsuits against the company.
• Enhanced Operational Efficiency: Compliance programs help streamline operations by establishing clear procedures and reducing the likelihood of disruptions caused by legal disputes or regulatory investigations.

Ongoing Maintenance and Review

A compliance program is not a one-time initiative but an ongoing process that requires regular maintenance and review. Internal teams should work closely with legal counsel and compliance officers to continually assess the program’s effectiveness and make necessary adjustments. This includes staying informed about changes in laws and regulations, updating policies and training materials, and addressing any new risks that arise.

Developing and maintaining a robust compliance program can create a solid foundation for legal and ethical operations, significantly reducing the risk of litigation from internal sources and protecting long-term success.

To ensure your compliance program is comprehensive and tailored to your company’s unique needs, the Employment and Labor group at Wagner, Falconer & Judd is here to help. Our team of experienced attorneys and HR Professionals can work with you to assess, develop, and enhance your compliance strategies, providing the legal expertise needed to protect your business from internal risks. Contact us today to take your compliance program to the next level and safeguard you from costly litigation.