Hot Topics in Compliance
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.
“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.