Perspectives

Get ready for a new year filled with changes to the employment law landscape. As we step into 2024, there is a fresh wave of regulations and requirements heading our way, and it’s crucial to have your HR and Compliance teams up to date on the laws taking effect in 2024 that will impact their business. Let’s explore some of the major changes set to unfold in 2024 and the notable changes and potential repercussions from being non-compliant.

Exempt Salary Threshold Increase

On August 30, 2023, the U.S. Department of Labor announced their plan to increase the exempt salary threshold from $684 per week to $1,059. Employees will need to earn $55,068 or more per year to be exempt from overtime pay. Before we discuss the steps employers should consider taking to prepare for this proposed plan, it’s important to note that this proposal isn’t law yet. That means there is time to understand and plan for the changes if and when they become law.

A great first step is to review your pay practices and start to prepare for compliance.

How many of your employees fall under the “white-collar” exemption? Qualifying employees will meet the following criteria:

1. Paid on a salary basis
2. Paid at least the designated minimum weekly salary
3. Perform certain duties

This new threshold amount is a significant jump from the current guidelines, so it will likely require some planning on your part if you have multiple employees that make less than the proposed amount. Be sure to review exempt employees and ensure job positions meet the associated duties test.

Another recommendation is to give employees plenty of notice on the changes, and discuss the plans with the leaders of the employees impacted by the change.

Plan to provide a written communication to each employee about the specific changes to their compensation and what new responsibilities come with the changes, such as timekeeping, meal and rest breaks, and other requirements. Some states require advance notice of wage changes, so you should check your local requirements.

As previously mentioned, making sure exempt employees meet the duties test is a vital step of planning.

A summary of the basic requirements under federal law for the white-collar exemptions are as follows:

Executive Exemption

• The employee’s primary duty must be to manage the enterprise or customarily recognized department/subdivision
• Employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent
• The employee must have the authority to hire or fire employees, or the employee’s suggestions and recommendations as to hiring, firing, or any other change of status must be given particular weight

Administrative Exemption

• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or its customers
• Employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance

Professional Exemption

• The employee’s primary duty must be the performance of work requiring advanced knowledge, predominantly intellectual in character and which requires the consistent exercise of discretion and judgment
• The advanced knowledge must be in a field of science of learning
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Last, and certainly not least, you should evaluate applicable state laws. Your state may have higher, stricter, or different wage and hour requirements than this federal proposal. For example, some states have a higher salary threshold for the white-collar exemptions than the FLSA’s $684 per week. Others might have different exemptions or exceptions, including those where the salary exemption related to practicing medicine. And of course, some states (and cities!) have higher minimum wage rates and/or overtime-type requirements.

New Marijuana Laws

As the legality of recreational marijuana has evolved, so have the regulations regarding marijuana in the workplace. California has officially, and for the first time, provided protections for users of recreational marijuana within the employment context. This new bill, which takes effect on January 1,2024, amends the Fair Employment and Housing Act (FEHA) by making it unlawful for an employer to discriminate against an applicant or employee for the use of marijuana off the job and away from the workplace and for an employer-required drug screening test that finds the person to have non-psychoactive cannabis in their system. (This is the THC left behind in the body after the “high” feelings have left. Indicating that marijuana has been consumed in some capacity in the last few weeks.) Essentially, this bill prohibits employers from holding it against applicants if the test determines there is evidence of past marijuana use. The general intent of employment related drug testing is to test for impairment on the job/at the jobsite, versus long-term use. If the trend started by California continues, traditional and common tests for marijuana will no longer be used for pre-employment drug screening or be the basis for discipline or termination of an employee.

Importantly, California’s AB 2188 will not take away an employer’s right to maintain a drug-free workplace. You can continue to issue disciplinary actions against employees who possess or use cannabis on the clock.

• Exemptions include:
  • building and construction employees
  • Applicants or employees hired for positions that require federal government background investigations or security clearances
  • Applicants or employees required to be tested under state or federal law

The state of Washington also implemented new marijuana laws taking effect January 1, 2024. The new law does not prohibit employers from:

• Basing initial hiring decision on scientifically valid drug screening methods that do not include non psychoactive cannabis metabolites
• Maintain a drug and alcohol-free workplace
• Complying with employer obligations required by federal law
• Testing for controlled substances other than pre-employment, such as post-accident testing or testing because of a suspicion of impairment or being under the influence
• Testing a job applicant for a spectrum of controlled substances, including cannabis, only if the cannabis results are not provided to the employer

Effective January 1, 2024 the law does not apply to applicants seeking a position:

• Requiring a federal government background investigation or security clearance
• in law enforcement, fire protection, or the airline or aerospace industries
• as a first responder or corrections officer
• That is a safety-sensitive position for which impairment while working presents a substantial risk of death, if the employer identified the position as safety-sensitive before the applicant’s application for employment

Paid Family and Medical Leave

Colorado employers are already well aware of their new Paid Family and Medical Leave laws, as they were required to begin contributing to the benefit on January 1, 2023. Beginning January 1, 2024, employees may start using the benefit. Employees can use the paid leave up to 12 weeks in the application year for:

• Birth
• Adoption
• Foster care placement
• Care for a family member with a serious health condition
• Qualifying exigency related to a family member being on active duty
• Certain purposes related to employee or employee’s family member experiencing domestic violence, harassment, sexual assault, or stalking.

Employees may take an additional 4 weeks for a serious health condition related to pregnancy or childbirth complications.

New Pay Transparency Laws

New transparency laws around salary history and how salaries are shared in the workplace and in job postings are just one way legislation is pushing for a more open and accountable workplace. Several states have laws taking effect in  addressing this issue.

• Minnesota became the 29th state to prohibit employers from inquiring into an applicant’s salary history. (Taking effect January 1, 2024)
• Oregon created a private right of action for employees to seek damages for an employer’s violation of the salary history ban. (Goes into effect January 1, 2024)
• Colorado signed S 23-105, which expands notification requirements in Colorado’s Equal Pay for Equal Work Act beyond “promotional opportunities” to “job opportunities”, eliminating any arguments that a posting is not required because an opportunity is not promotional.

Hawaii enacted legislation that impacts how employers post open job positions. SB 1057 (taking effect January 1, 2024) will:

• Require most employers with 50 or more employees to disclose a position’s hourly rate or salary range in certain job postings
• amend existing equal pay requirements by prohibiting an employer from paying employees in any protected category of the state’s employment discrimination statute less than it pays other employees for “substantially similar work” instead of “equal work”.

OSHA Changes

Employers across various industries are bracing themselves for changes as OSHA publishes a final rule in July, 2023 amending its regulations to require certain employers in designated high-hazard industries to electronically submit injury and illness information to OSHA. Among the amendments, which take effect January 1, 2024, is a new requirement that employers with 100 or more employees in certain high-hazard industries to electronically submit information from their Form 300–Log of Work-Related Injuries and Illness, and Form 301-Injury and Illness Incident Report to OSHA once a year. These submissions are in addition to submission of form 300A-Summary of Work-Related Injuries and Illness. Click here to read the final rule as published.

According to OSHA, the “high-hazard” establishments include, (but are not limited to) manufacturing, grocery stores, agriculture construction, transportation, warehousing and storage, performing arts, and retail. A full list of the “high-hazard” industries can be found here. These requirements apply to establishments covered by Federal OSHA as well as establishments covered by states with their own occupational safety and health programs. 

Miscellaneous Changes

California  

The Industrial Welfare Commission is back.

IWC is the administrative agency that was established to regulate wages, hours, and working conditions in California. It’s job is to meet by January 1, 2024 to convene industry-specific wage boards and adopt orders specific to wages, hours, and working conditions in such industries.

Colorado

Colorado enacted the Job Application Fairness Act (JAFA), effective July 1, 2024, which prohibits employers from requesting or requiring that job applicants provide information related to “age, date of birth, or dates of attendance at, or graduation from an educational institution’ on initial employment applications.

Connecticut

Connecticut’s “An Act Expanding Workers’ Compensation Coverage for Post-Traumatic Stress Injuries for All Employees” which expands the definition of employee to allow nearly all workers (not just first responders) who suffer certain tragic qualifying events to claim workers’ compensation benefits, effective January 1, 2024.

Illinois

Governor J.B. Pritzker signed SB 2034, the Child Bereavement Leave Act (also known as Zachary’s Parent Protection Act. The new law requires employers with at least 50 employees provide between 6 and 12 weeks unpaid leave (depending on employer size) for employees who have lost a child due to suicide or homicide. The law becomes effective January 1, 2024.

Effective January 1, 2024 Illinois will require private employers to provide a minimum of 40 hours of annual paid leave to employees to be used for any reason. Employers can choose to frontload the leave on the first day or employment or a designated twelve month period or use an accrual method. Employers may not require any documentation or certification of the need to take leave. Employers may require up to seven days’ notice if the leave is foreseeable and set a reasonable minimum of increment of no less than two hours per day.

The Illinois DOL published Paid Leave for All Workers Act FAQ, which provides guidance on the state’s Paid Leave for All Workers Act. (Effective January 1, 2024).

In the dynamic landscape of ever-evolving employment laws, staying ahead of regulatory changes is vital for a business to thrive-it has become clear that compliance is not only a legal obligation, but a strategic one as well. By entrusting the responsibility of staying up to date on your HR and compliance needs to legal professionals well-versed in employment law, businesses can simplify complexities efficiently, saving both time and money. Beyond those benefits, outsourcing mitigates the risks associated with regulatory compliance, shielding organizations from potential legal repercussions.

To learn more about how Wagner, Falconer & Judd can support your business needs, reach out for a consultation.

The Employment Law team was recently asked to speak on a panel regarding Hot Topics in Compliance-and we ran out of time! 2023 has been a big year for the legal landscape in general, and in a post-pandemic world the workplace garnered a lot of focus. With some states introducing recreational marijuana, and others getting rid of non-competes, HR professionals are left figuring out how these changes affect them.

Paid Leave Laws

“Who qualifies for paid leave, and why is there so much confusion around this?”   There is confusion because who qualifies for paid leave varies depending on the law that we are talking about and the location where your employee works. For example, New York state and New York City each have a paid sick leave law, but they are different from one another. California and San Francisco each have paid sick leave laws, but again, they differ. And they differ in pretty significant ways sometimes. Employees in California can rack up up to 3 days of paid sick leave, while San Francisco employees can get 40 hours if their employer has 1-9 employees or 72 hours if the company has 10 or more. The amount of carryover, allowed uses for leave, and many other components of leave laws vary also.

Some jurisdictions also have paid family and medical leave-which allow employees to get paid leave for reasons similar to FMLA. Many operate as an insurance program where the employer and employee both pay a portion of wages into a state-run fund.

“What types of paid leave are mandated by law?” There are many types of paid leave mandated by law. The most common are paid sick leave laws and paid family and medical leave. However, some states require paid jury duty leave-including states you not think of like Nebraska, Georgia, and Tennessee.

Non-Competes & Severance Agreements

“There has been a lot of talk in the industry about the strength of non-competes and severance agreements. Where are we seeing challenges to these agreements, and how are they holding up in the courts?”   Non-compete agreements outright banned in California, North Dakota, Oklahoma, and most recently Minnesota. Also, there are many more states that place some kind of limitation on which employees can be subject to non-competes-most based on salary threshold, but some others only allow them against exempt employees. Where they are still allowed, courts tend to disfavor them as unreasonable restraints on free trade. So, where they are still allowed, the agreements must be narrowly tailored as to their geographic scope, duration, and the activity that is prohibited.

“Does a non-compete have strength if I agree to it, regardless of local legal support?” If a non-compete is banned in the jurisdiction where the employee works, even if the employee voluntarily agrees to the non-compete, it is unlikely to be worth the paper it’s written on. Besides, there are often better ways to protect a company’s legitimate business interests including with comprehensive non-solicitation agreements (both for customers/clients and employees) and robust confidentiality and trade secret protections.

“What states are in the ‘ones to watch’ column?”   Employers with operations or employees in New York should be watching what Governor Hochul might do. On June 20,2023, the New York State Assembly passed a bill that, if signed into law by Governor Hochul, will effectively ban future non-compete agreements.

Overtime

“Did the new overtime proposal get published?”  Yes! the DOL announced a notice of proposed rulemaking in August, that would restore and extend overtime protections to 3.6 million salaried workers. The proposed rule would guarantee overtime pay for most salaried workers earning less than $1,059 per week, about $55,00 per year.

“What do we anticipate this new change will include? How can small businesses, for example, prepare to meet new regulations?”   It’s unclear what will happen here since the last time the DOL tried to increase the salary threshold, the 2016 final rule to change the overtime thresholds was enjoined by the U.S. District Court for the Eastern District of Texas and was subsequently invalidated by that court.

Salary Transparency Laws

“What are the requirements for hiring practice? Is posting on a job listing enough?”  Generally, salary transparency laws require that employers disclose the hourly or salary compensation, or a range of hourly or salary compensation in all job postings. The risk is, of course, that by publishing salary ranges, it may expose underlying pay equity issues.

“Are employers required to post all jobs, eve those that have been filled already?”   Under Colorado’s Equal Pay for Equal Work Act, employers must announce to all employees all advancement opportunities and job openings. We wouldn’t recommend a “hollow” job posting where the job has already been filled, but companies often do to comply with the law.

“Asking about salary history in an interview-are we done with that?”  This one is a bona fide trend. Employers may not ask about an applicant’s pay history, nor can they rely on pay history to determine wages, This is the case in several states and some cities as well.

State Mandated Retirement

“What states have adopted these so far?”  When states require employers to provide their employees with retirement savings opportunities, it’s known as a state-mandated retirement. Businesses generally have two ways to comply with these laws-enroll their employees into a state-sponsored retirement program or sponsor a plan through the private market. States like Washington and Connecticut have mandated plans in place, while other states have passed them into law, ut have yet to fully implement them.

“Who is eligible”   It depends, but for example, per Connecticut’s MyCTSavings Program, employers with five or more employees, of whom have been paid more than $5,000 in the calendar year. Employees are auto-enrolled and contribute 3% after 120 days for employees who are 19 or older.

“How might this affect a payroll provider?”  You may need to make mandatory deductions from an employee’s pay and/or contributes to a state-run fund on a periodic basis.

“Are there requirements for employee match or other employer contributions above standard payroll?”  It seems like at this time, there is no cost to employers and that the accounts are funded solely through employee contributions.

“Do employees have to participate?”  Typically, participation is optional. For example, based on Connecticut’s plan, employees are automatically enrolled if they are 19 years old or older, but they can choose to opt out if they would like.

Staying on top of ever-changing employment laws is a full-time job. Let us help you out with that. Through our service hotline, you can ask an attorney or HR professional all your pressing employment law questions.

While a full-blown recession seems to remain at bay, inflation and raising interests rates have people, and companies, tightening their pursestrings.

When times are tough, focusing on a few key things can help you weather the storm and come out the otherside. With over nine decades of guiding companies through legal matters, the attorneys at WFJ agree on three very important ways to keep collecting from their customers no matter the economic climate:

1. Be efficient

2. Be resilient

3. Be adaptable

Efficiency

Invest in technology that simplifies your process and keeps your team on the same page. ERP and CRM systems can streamline your accounting and collection process so you aren’t wasting valuable resources looking for payments or tracking down customer data. Another way to tighten up your systems is to pay close attention to the language in your credit applications, security interests, personal guarantees, etc. This is a great time to reach out to your in-house counsel or attorney to review your documents and paperwork-looking for any looming deadlines, opportunities for improved status, or ambiguous language. “Good paper” works for you, not against you.

Resiliency

Staying up-to-date on new laws and deadlines is a full time job-and having a firm understanding of your lien and bond rights is one of the best ways to secure your financial interests and protect your money and capital assets. Remaining diligent in reviewing your contracts, getting paperwork from clients, and staying on top of your accounts receivables department will also ease tensions if money gets tight.

Adaptability

Building a team that communicates well and can easily jump in and pivot when something isn’t working is vital to protecting resources-and money- when times are tough. Providing education and resources like legal support hotlines can help your employees feel empowered in their decisions and capability to tackle whatever issues might arise. Having the ability to outsource in-house counsel for your financial matters could make the difference on how your business survives a tough economic run.

As you navigate complicated financial times, remember to put tools in place you can leverage to avoid defaults, recover money, and mitigate risk. Watch trends, and plan accordingly. Most importantly, remember that the experienced team at Wagner, Falconer & Judd is here to guide you through all your complex legal issues. Reach out to us today for a consultation with a team member. 

Taking the time to develop a proper hiring process can save you the trouble of a “bad hire” in the long run. The Society for Human Resource Management estimates the cost to replace an employee is six to nine months of the employee’s salary. And that’s just the cost if that employee simply leaves. If you are found to have used discriminatory interview tactics, it could cost you much more. That’s why our employment law attorneys recommend companies adopt a standard procedure for all new hires.

A few things to consider:

Define the Position

• Make sure that you know what the job actually is
• Create a job description. Or if one exists, make sure that it is up-to-date
• What qualifications are required?
• What are the essential functions?
• What are the non-essential functions?
• Are there physical requirements?
• Where do they fit in the org chart?
• Determine salary range and any special benefits package the position qualifies or doesn’t qualify for
• Determine hiring team
• Who is the hiring manager?
• Who will be involved from HR?

Post the Opening

• If affirmative action is applicable, the employer should be sure to include appropriate targeted recruitment sources

Narrow Down Job Applications

• Apply consistent rules to completion of application form
• Determine if pre-interview testing is needed (e.g., typing words per minute, specific aptitude or personality tests)
• Document selection process
• Identify criteria used
• Identify who was involved in decision making process
• Keep records
• Extend interview invitations

Interviewing

• Choose interview types, and determine the number of interviews you will conduct
• Who will conduct them?
• Ensure interviewers are aware of proper interviewing technique (e.g., not asking impermissible questions)
• Questions should be:
  • Job related
  • Narrowly-tailored
  • Consistent
• Each candidate should receive the same questions
• Avoid making any promises or statements that could be construed as promises
• These later could be interpreted as offers of employment or promises of employment for a specific period
• Document each interview candidate right after the interview
• Retain records (application and interview notes) for at least 12 months

Offer Position

• Send offer letter after informing candidate on the phone
• Ensure that the offer letter does not undermine at-will status of the position
• Provide wage, start date and key terms of employment
• Communicate with other conditions the offer is contingent on, if any (e.g., background check, drug test, I-9 verification)

Complete Background Check (if necessary)

• Comply with any FCRA requirements on background checks
• Provide written disclosures
• Obtain signature of candidate

Being intentional, and most importantly, consistent in your hiring practices is an important way to mitigate risk for your company and ensure your new hire is the right fit. For more insight on perfecting the hiring process, check out another recent blog from our Employment Law team The Art of Hiring Slow and Firing Fast: A Guide for Building a Successful Team .

Intestate:

If you die without a will, it is called “dying intestate” or “intestate succession”. Without proper estate planning, state law and statutes will determine how your estate is distributed. Even if you don’t have many assets, dying without a will can leave behind issues for your spouse or children. If you have minor children, it will not address who you want to care for them or handle their financial affairs. It can also impact benefits of a special needs child. And if your estate needs to go through the probate process? Without a will, you will not be able to choose who administers your estate. Which could leave your assets in the hands of someone who may not be equipped to take on that responsibility.

Power of Attorney:

A power of attorney is a legal document that allows someone else to act on your behalf to handle your financial and property matters. Putting a Power of Attorney in place proactively can save you headaches, hassle and money in the future. A financial POA helps you put a plan in place for your finances should you become incapacitated due to dementia, traumatic brain injury, or other impairment that could affect your mental function. Financial POA’s can be “durable” (made in advance as part of your larger estate planning efforts) or temporary. For example, a servicemember being deployed can create a POA to pay their bills, manage their property or handle other financial business in their absence. If you don’t create a POA in advance, a friend of family member might have to go to court to have a guardian appointed if you become incapacitated and are no longer able to make decisions for yourself. That can be very costly and public.

Health Care Directive:

A Health Care Directive can work hand-in-hand with a POA. This document will let you determine who you would like to make medical decisions on your behalf when you are unable to do so. It designates someone to work with your healthcare team when you cannot. Choosing someone to act as your health care agent is important. Even if you have other legal documents in place regarding your care, not all situations can be anticipated, and some situations may still require someone to make a judgment about your care wishes. It is important to choose someone who can be trusted to be your advocate if there are disagreements about your care.

Jointly Held Assets:

Jointly held assets are just what they sound like-assets held in the names of two or more people. Assets held under this agreement have a right of survivorship, which means the assets pass automatically to the survivor upon the death of the first person. These assets can avoid probate in some situations-when couples (married or not) acquire real estate, vehicles, bank accounts, securities, or other valuable property together for example. It’s important to mention that there are risks associated with this arrangement. If the person you are holding the assets with has outstanding debts, their creditors could seize an interest in your home or bank account. Holding a jointly held assets can complicate a divorce or other relationship problems. If you have a jointly held bank account, your co-owner could withdraw all the money without your consent. In all estate planning matters, it’s important to put people you trust in charge of your finance, business, and property matters.

Last Will & Testament:

One of the most common and well known documents available to you in Estate Planning is your last will and & testament.

A last will & testament will guarantee the following:

• You get to designate who you give your estate to
• Your choice of personal representative or executor
• An approved guardian of your minor children

A last will & testament will NOT help you avoid probate.

Living Trusts:

A living trust is a legal document you create during your lifetime to protect your assets and direct your distributions after your death. An appointed trustee works in tandem with you (the grantor) to distribute funds from the trust or control beneficiary assets during your lifetime and after. Unlike a will, a living trust takes effect while you (the grantor) are still living. The trust does not have to go through probate for assets to reach the intended beneficiaries.

There are two primary types of living trusts:

Revocable

The most common type of living trust, it is a trust whereby the person who creates it maintains control over the assets placed within the trust. You can change and amend trust rules at any time. You are also free to change beneficiaries, change the trustee, remove assets, or terminate the trust. Revocable trusts often become irrevocable upon the grantor’s death.

Irrevocable

With this trust, the trust itself owns the assets and the grantor can’t designate themselves as the trustee-giving up certain rights of control of the trust. The trustee effectively becomes the legal owner. The name speaks for itself, once an irrevocable living trust is created, the named beneficiaries are set and the grantor can do little to amend that agreement. Changes may need to be approved by the courts. In addition, you can never take back the assets assigned to an irrevocable living trust.

The benefits of a living trust are:

• Distributes your assets similar to a will
• Can help eliminate or reduce estate taxes
• Can avoid probate
• Can be helpful in certain family circumstances

Most people don’t create an estate plan because they feel like they don’t need one, or it’s too expensive. However, failing to plan now can create major headaches and expenses for your loved ones in the future. Let the attorneys at Wagner, Falconer and Judd assist you as you begin your estate planning journey! Give us a call today to learn more about getting started.

If you missed Part One of our 50 state Legal Update-you can find it here.

On top of pay transparency, cannabis, and paid leave state laws, the National Labor Relations Board ruled on regulations on a federal level.

McLaren Macomb Decision:

On February 21, 2023, the National Labor Relations Board held that a severance agreement that prohibited employees from making disparaging statements about the employer or disclosing the terms of their severance agreement violated Section 7.  The new standard is that a severance agreement violates the NLRA if “its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights.”

Employers should review their existing separation agreements and work with counsel to determine how to handle this:

• Remove the provisions all together
• Narrow the restrictions considering what information that the employer needs to protect
• Include disclaimer language, though mileage here can vary
• Do nothing? (and there is the very likely possibility that this decision will be challenged and overturned by the federal courts, but as of the time of publication, no such challenge has been filed.

Non-Competes:

On January 25, 2023 the FTC released a Notice of Proposed Rulemaking that would:

• prohibit employers from utilizing non-compete clauses
• This rule would apply to virtually all employers regardless of size
• And apply to all employees regardless of pay or position-includes independent contractors
• Nationwide in scope

The non-compete clause is defined as contractual term between an employer and a worker that prevents the worker from seeking or accepting employment or operating a business after the conclusion of the worker’s employment. It also requires that employer rescind existing non-competes with workers.

The propose rule:

• Does NOT apply to a person who is selling a business entity
• Does NOT apply to a franchisee-franchisor relationship
• Does NOT ban non-disclosure/confidentiality agreements or non-solicitation agreements
• However, if the non-disclosure agreement is so broad that it would effectively prevent a worker from working in the same field after employment that would be barred.)

Now what?

The original 60-day comment period was supposed to end on March 20, 2023, but the FTC extended that to April 19, 2023. The FTC will adopt a final rule with compliance required 180 days after April 19, 2023-meaning mid-October 2023. However, the FTC is expected to vote April 2024 on the final version of its proposal to ban non-competes. If the non-disclosure agreement is so broad that it would effectively prevent a worker from working in the same field after employment, that would be barred. During that 180-day period, companies would need to assess whether they need to make changes to their restrictive covenants and then negotiate, potentially offer separate consideration for, and enter into new agreements with workers.

There will likely be legal challenges be the enforcement of this rule begins.

Workforce Mobility Act:

A bipartisan group of U.S. senators introduced the bill that would largely ban the use of non-competes under federal law.

It would codify non-compete arguments as an unfair trade practice.

Under the act’s definitions, a “noncompete agreement” mean an agreement entered into after the date of the enactment of the Act between a person and an individual performing work for the person that restricts such individual, after the working relationship between the person and the individual terminates, from performing:

• Any work for another person for a specified period of time;
• Any work in a specified geographical area;
• Any work for another person that is similar to such individual’s work for the person that is a party to such agreement.

AB 2223 would help ensure that no person in our state is ever investigated, prosecuted, or imprisoned for losing or ending their pregnancy. AB 2223 protects reproductive freedom by clarifying that the Reproductive Privacy Act prohibits pregnancy criminalization, removes outdated provisions requiring coroners to investigate certain pregnancy losses, and ensures that information collected about pregnancy outcomes is not used to target people through criminal or civil legal systems.

National Labor Relations Board (NLRB):

On May 30, 2023 the NLRB GC Jennifer Abruzzo issued a memo taking the position that non-compete agreements violate Section 7 rights (Sound familiar?) Per GC Abruzzo, non-competes limit an employee’s ability to find work elsewhere, therefore diminishing their bargaining power for the purpose of concerted action.

It is the job of the General Counsel to prosecute violations of the NLRA, and this statement from Abruzzo serves as a warning to employers that they may face an unfair labor practice charge if they require employees to sign non-competes. However, Abruzzo’s memo is only a statement of her interpretation of the NLRA.

State Non-Compete Limits/ Bans:

On May 24, 2023 Minnesota’s governor Walz signed into law a far-reaching omnibus jobs and economic development and labor funding bill that, among other things, bans employment non-compete agreements signed after July 1, 2023.

On May 4, 2023, Indiana Governor Eric Holcomb signed SB 7 into law, which will render unenforceable all non-compete agreements between employers and primary care physicians entered into on or after July 1, 2023.

Changes to I-9 Procedure:

ICE released early this week that they will not be extending the COVID-19 I-9 verification flexibility again and the flexibility rule is set to end on July 31, 2023 (as announced in October 2022 during the last extension end period.) Along with the flexibility ending, is also a requirement that all employers who took advantage of the COVID-19 related flexibility will have until August 30, 2023, to do in-person verification of employment documents that were only inspected virtually

The Employment Law attorneys at Wagner, Falconer & Judd stay up to date on these laws so you don’t have to. Please reach out to us for consultation if you have questions about how these new regulations effect your current policies. We always recommend ensuring your employment policies stay as up-to-date as possible to help eliminate risk for your business. And we’re here to help!

There are a number of new state and federal laws that are set to take effective this summer-and many effect employers all across the board. Let’s jump into it.

Minimum Wage Increase: (If you missed our last Minimum Wage Update-you can find it here.)

A number of cities and states amended their minimum wage regulations:

• Connecticut: $15.00 (Effective July 1, 2023)
• Florida: $12.00 (Effective July 1, 2023)
• City of Chicago: $15.00 for employers of 4-20 employees (Effective July 1, 2023)
• Montgomery County, MD: %15.00 for employers of 11-50 employees and $14.50 for employers of 10 or fewer (Effective July 1, 2023)
• Minneapolis, MN: $14.50 for employers of more than 100 employees (Effective July 1, 2023)
• St. Paul, MN: $15.00 for employers of 101-10,000 employees and $13.00 for employers of 6-100 employees and $11.50 for employers of 5 or fewer employees (Effective July 1, 203)
• Nevada: $10.25 for employers offering specified health benefits and $11.25 for all other employers (Effective July 1, 2023)

Marijuana Laws:

A few states have adjusted their cannabis laws, and some have decidedly NOT:

Kentucky: On March 31, 2023, Kentucky legalized medical marijuana use. There is no requirement that employers accommodate an employee’s use of medical cannabis and employers can still drug test their employees. (Effective January 1, 2023)

Washington: On May 9, 2023, WA signed a law prohibiting employers from making hiring decisions based on off-duty cannabis use or positive pre-employment drug tests. (Effective January 1, 2023)

Minnesota: On May 30, 2023, MN became the 23rd state to legalize recreational marijuana. This bill includes significant changes to MN’s Consumable Products Act and Drug testing law.

Maryland: MD also passed recreational marijuana legislation. Adults 21 and older can possess up to 1.5 ounces of cannabis flower (Effective July 1, 2023)

But NOT Oklahoma. OK voters rejected a ballot initiative that would have legalized recreational marijuana for adults over 21 years old. It was rejected by a margin of over 20%.

Paid Family and Medical Leave:

Maryland: Regulations regarding Time to Care Act (Contributions begin on October 1, 2023)

Minnesota: MN’s Family and Medical Benefit Insurance Program is effective July 1, 2023 with contributions and benefits available beginning January 1, 2023.

Sunsetting of Paid Sick Leave and COVID-19 Related Leave:

Georgia: Kin Care Law was going to sunset on July 1, 2023 but the governor signed it into law-which will remove the sunset provision.

Los Angeles County: LA County’s Emergency COVID-19 Leave expired on April 14, 2023. The City of LA’s expired on February 15, 2023.

Colorado: COVID-19 related leave provisions expire June 8, 2023.

Minneapolis: New employer waiver sunsets June 30, 2023

Nevada: COVID-19 vaccination leave expires on December 31, 2023

New York: COVID-19 vaccination leave expires on December 31, 2023

Philadelphia: COVID-19 leave and vaccination leave sunsets on December 31, 2023.

Anti-Discrimination Laws:

Minnesota: February 1, 2023 MN governor signed a law to prohibit discriminations based on hair texture and hair styles, commonly referred to as the CROWN Act.

Michigan: House and senate have passed a bill that expands the language of the Elliott-Larsen Civil Rights Act protected categories to include sexual orientation and gender identity or expression. The bill defines gender identity or expression as “having or being perceived as having a gender-related-self-identity or expression whether or not associated with an individual’s assigned sex at birth.” “Sexual orientation” means having an orientation for heterosexuality, homosexuality, or bisexuality or having a history of such orientation or being identified with such an orientation.

New York City: On May 25, 2023 enacted an ordinance amending the New York City Human Rights Law to ban discrimination based on a person’s height and weight in employment (as well as housing and public accommodations.)

Texas: On May 27, 2023, Texas Governor Abbott signed into law the CROWN Act, banning racial discrimination based on hair texture or hairstyle in employment, as well as in schools and housing.)

Pay Transparency Laws:

New York State– March 3, 2023 amended its existing pay transparency provisions. This requires employees to disclose compensation or range of compensation for a job, promotion or transfer opportunity that will physically be performed in New York, including for any employee physically located outside the state who reports to someone in New York.  (Effective September 17,2023)

Minnesota– Now prohibits employers from inquiring into an applicant’s salary history (effective January 1, 2024)

The Employment Law attorneys at Wagner, Falconer & Judd stay up to date on these laws so you don’t have to. Please reach out to us for consultation if you have questions about how these new regulations effect your current policies. We always recommend ensuring your employment policies stay as up-to-date as possible to help eliminate risk for your business. And we’re here to help!

Check out Part Two for more information!