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Although this year's labor- and employment-related legislative activity was down slightly from that of 2013 – in part due to congressional gridlock – by no means was 2014 insignificant. Throughout the year, an influx of new and amended laws requires employers to establish, revisit, or revise policies and practices.
Although the November elections changed the political landscape in Washington as well as in a number of states, the contests were not solely between candidates for office. Voters also went to the polls to voice their position on ballot initiatives benefitting employees. On these issues, voters resoundingly approved pro-employee measures. Approval of these ballot measures suggests that employers could face even more new state and local mandates in the years ahead.
While our attention pivots to 2015, which brings a bevy of new compliance obligations for employers, we must also examine what transpired the past 12 months to understand continued and emerging challenges employers will confront in 2015 (and possibly in future years).
A divided Congress may have forestalled federal legislative changes, but the legislative gridlock at the federal level accelerated efforts by state and local jurisdictions to pass more labor and employment laws. As highlighted below, the types of new and amended laws, as well as the level of legislative activity, run the gamut.
Although wage and hour is the standout issue, states and localities also enacted measures concerning alternative dispute resolution, background checks, benefits, contingent workers, discrimination, leaves of absence, notices, posting, privacy, recordkeeping, reductions-in-force, retaliation, taxation, unemployment, whistleblowing, workers' compensation and workplace safety. While it is no surprise that California enacted the most employment laws in 2014, large and small states from every corner of the country also took action impacting employers.
State and local legislators made boosting lower-paid employees' wages a priority this year. In 2015, the minimum wage rates in at least 25 states will change. Moreover, Maryland has scheduled two increases: one in January and another in July 2015. Additionally, New York will continue its recent tradition of increasing minimum wage rates on New Year's Eve, with increases scheduled to take effect on Dec. 31, 2014, and again on Dec. 31, 2015. Employers in northern California's greater Bay Area will see four cities establish or increase their local minimum wage to an amount above the state rate, which is already higher than the federal minimum wage.
State and local elected officials also sought to improve employee well-being by mandating paid sick leave. There was a noticeable uptick in paid sick leave legislation in 2014. California and Massachusetts created measures that will take effect in 2015, joining Connecticut and the District of Columbia, and doubling the number of state-level jurisdictions with paid sick leave requirements. Local jurisdictions, however, continue to outpace states in enacting paid leave legislation. For example, in 2015, there will be more local paid sick leave laws in various New Jersey jurisdictions than exist at the state level nationwide. Shortly after California enacted a statewide law, voters in Oakland joined their neighbors in San Francisco by approving a paid sick leave measure. Although Oregon has no state-level requirement, paid sick leave is required in the city of Portland, and will soon be required in the city of Eugene.
There also is a burgeoning trend toward extending employment protections to non-employees. In 2015, California and Illinois will grant interns fair employment protections. This nearly doubled the overall number of states that do so, beyond just the District of Columbia, New York and Oregon.
The picture of compliance challenges in 2015 is not complete without an understanding of both regulatory and legislative changes. Just as the federal legislative gridlock prompted state and local governments to pass legislation similar to that stalled in Congress, the federal gridlock also prompted the Obama Administration to make changes through rulemaking, with some of these changes expected in 2015.
Legal obligations have become increasingly dynamic, so static employment guidelines, handbooks and trainings provide employers no refuge. Maintaining and providing up-to-date policies and practices is made more daunting by staggered effective dates for various new laws and regulations. Accordingly, employers must make diligent efforts to ensure compliance obligations are timely met at the federal, state and local levels. To assist employers, the chart below briefly summarizes select federal, state and local changes that will occur in 2015.
SB 2607 (2013)
Wage & Hour
Minimum wage increases to $8.75 per hour.
Hospitality Wage Order
Tipped employee maximum tip credit increases and varies by type of tipped employee. Provides increases to meal and lodging credit; uniform maintenance rates; and minimum salary requirement for exempt executive and administrative employees.
General Wage Orders
Provides increases to meal and lodging allowance; tips; uniform maintenance; and minimum salary requirement of exempt executive and administrative employees.
Building Services Wage Order
Provides increases to unit rate for janitors in residential buildings; minimum weekly wage; allowances for utilities; uniform maintenance rate; and minimum salary rate of exempt executive and administrative employees.
2015 Minimum Wage Determination
Minimum wage increases to $8.05 per hour.
Issue 5 (Minimum Wage Initiative)
Minimum wage increases to $7.50 per hour, with increases in January 2016 and 2017.
Alternative Dispute Resolution
Prohibits requiring an individual to waive the right to file a civil rights charge with the government or a lawsuit in court as a condition of entering into a contract for goods or service. Requires knowing and voluntary written waiver.
Prohibits imposing any waiting or affiliation period in addition to any waiting period imposed by an employer for a group health plan on an otherwise eligible employee or dependent. Amends requirements concerning eligibility for coverage exclusion.
Clarifies that the statute of limitations for liquidated damages for various labor code violations is the same as that for the underlying violation.
Provides that a client-employer is jointly liable with the labor contractor for wage and hour and workers' compensation law violations.
Extends anti-discrimination and harassment protections to interns and volunteers, and broadens categories of programs subject to this prohibition.
Undocumented aliens can obtain a driver's license that displays a notice stating the license does not establish eligibility for employment. Employers cannot discriminate against individuals possessing or presenting such licenses.
AB 1522 / DLSE Documents
Leaves of Absence
New paid sick leave law's notice, posting, and wage statement requirements take effect. (See below, Laws Effective July 1, 2015). The state's labor department issued a template paid sick leave poster and wage theft protection act notice.
Volunteer emergency leave law's definition of emergency rescue personnel is expanded to include an officer, employee, or member of a disaster medical response entity sponsored or requested by the state.
Expands data security breach requirements to businesses that maintain computerized data involving California residents' personal information. Requires businesses to offer identity theft prevention services to affected individuals. Strengthens protections concerning Social Security numbers.
For withholding law purposes, an employee does not include any member of a limited liability company that is treated as a partnership for federal income tax purposes.
Permits same-sex marriage, and recognizes out-of-state same-sex marriages.
A required rest or recovery period is counted as hours worked.
Exempt Computer Software Employee Pay Requirements
Computer software professionals are exempt from overtime if their hourly rate of pay is no less than $41.27. If paid on a salary basis, the employee must earn an annual salary of no less than $85,981.40, be paid at least once a month, and be paid a monthly amount of no less than $7,165.12.
Exempt Licensed Physician & Surgeon Pay Requirements
Physicians and surgeons are exempt from overtime if their hourly rate of pay is at least $75.19.
Increases whistleblower retaliation penalties. Creates a private right of action for unfair immigration-related practices. Amends immigration-related discrimination protections.
Generally prohibits stay or suspension of a requirement to abate a hazard found to constitute a serious, repeat serious, or willful serious violation, while the employer's appeal of the citation is pending.
Expands AB 1825 training requirements to mandate training about preventing "abusive conduct."
Amends serious injury or death reporting requirements to include email.
Sets minimum wage at $9.60, and allows a $1.50 rate reduction if medical benefits are provided. Future increases will occur.
California (San Francisco)
Minimum wage increases to $11.05 per hour.
Note: An additional increase will take effecton May 1, 2015.
California (San Jose)
Minimum wage increases to $10.30 per hour.
Ordinance No. 3047-14
Establishes a minimum wage of $10.30 per hour; yearly increases are thereafter based on the consumer price index.
Minimum Wage Order 31
Minimum wage increases to $8.23 per hour, and tipped employee minimum cash wage to $5.21 per hour.
Amends various defined terms in wage payment laws. Also amends final wages law, enforcement provisions, and available employee remedies. Adds recordkeeping requirements and penalties.
Amends how employer coverage is determined under paid sick leave law. Adds prohibitions.
Minimum wage increases to $9.15 per hour; maximum tip credit varies depending on type of tipped employee. Additional increases will occur in January 2016 and 2017.
Addresses how to dispose of certain records when the employer no longer retains them.
Addresses destruction of documents containing personal information.
Minimum wage increases to $8.25 per hour.
Minimum wage increases to $8.05 per hour, and tipped employee minimum cash wage increases to $5.03 per hour.
Minimum wage increases to $7.75; for tipped employees, maximum tip credit increases to 50 cents if the employee's wage plus tips are at least $7 more than the minimum wage. Additional increases in January 2016, 2017, and 2018.
Restricts employers' use of criminal background checks on job applicants, unless an exception exists.
Prohibits discrimination based on pregnancy. Requires reasonable accommodation of pregnant employees. Includes notice and posting requirements.
Extends sexual harassment and sexual harassment retaliation protections to interns.
Permits wage payment via payroll debit card if certain requirements met.
Announcement re: Withholding & Reporting
Implements quarterly income tax and unemployment reporting system. Creates new forms.
Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to $4.37 per hour. Additional increases to occur in July 2015, 2016, 2017, and 2018. Also amends training wage and wage paid to employees in amusement / recreation establishments.
Maryland (Montgomery County)
Expedited Bill 36-14
Creates "ban-the-box" law for employers with 15 or more employees. Prohibits criminal inquiries, disclosures, and checks until first interview concludes, unless exception exists.
Minimum wage increases to $9.00 per hour; for tipped employees, minimum cash wage increases to $3.00 per hour and maximum tip credit increases to $6.00 per hour. Additional increases to occur in January 2016 and 2017. Minimum wage for agriculture and farming employees also increases.
Establishes certain requirements for the provision of health insurance in Minnesota to be further in line with the federal Patient Protection and Affordable Care Act.
Renders inadmissible in a private lawsuit against an employer evidence of acts committed by an employee where information relating to the employee's criminal history record was expunged before s/he committed the act at issue.
Minimum wage increases to $7.65, and tipped employee minimum cash wage increases to $3.83.
Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to $5.87 per hour. Additional increase to occur in January 2016.
Allows wage payment via payroll debit card if requirements met.
Prohibits conditioning employment on a promise to refrain from disclosing wages, or waiving the right to disclose wages, salary, or paid benefits, and retaliation for disclosure. Amends the statute of limitations for administrative claims and private suits. Includes notice and posting requirements.
Minimum wage increases to $8.38 per hour.
New Mexico (Las Cruces)
Ordinance No. 2726
Establishes a minimum wage of $8.40 per hour. Sets additional increases for January 2016 and 2017, and annual increases beginning January 2018. Sets tipped employee wage rates, and creates notice, posting, and recordkeeping requirements.
Minimum wage increases to $8.10 per hour, and tipped employee minimum cash wage increases to $4.05 per hour.
Minimum wage increases to $9.25 per hour.
Minimum wage increases to $9.00 per hour; for tipped employees, maximum tip credit increases to $6.11 per hour.
Minimum wage increases to $8.50 per hour, and tipped employee minimum cash wage increases to $4.25 per hour. Annual updates indexed to inflation in 2016 and after.
Restricts employer access to applicant and employee social media information and accounts, unless an exception exists.
Ordinance No. 20140828-041
Prohibits use of portable electronic devices while operating a motor vehicle.
IRS, HHS & EBSA Final Regulations re Excepted Benefits for Dental, Vision, & EAPs
Regulations address the treatment of dental and vision benefits and employee assistance programs as limited excepted benefits, which are generally exempt from the ACA market reform requirements. Rules apply to group health plans and group health insurance issuers for plan years starting in 2015.
Executive Order 13658
Minimum wage increases to $10.10 per hour for employees of certain government contractors; increases minimum wage of tipped employees to $4.90 per hour. Provides for future increases.
Affordable Care Act's Shared Responsibility Provision
The ACA's employer "pay-or-play" mandate will generally apply to larger firms with 100 or more full-time employees as of January 1, 2015.
IRS Rev. Proc. 2014-30.
Increases annual limitation on deductions for HSAs to $3,350 for an individual with self-only coverage under a high deductible health plan and $6,650 for an individual with family coverage under a high deductible health plan.
OSHA Final Rule re 29 C.F.R. part 1904
Updates list of industries that are partially exempt from OSHA recordkeeping requirements. Expands the types of work-related injuries that must be reported.
Minimum wage increases to $9.15 per hour, and tipped employee minimum cash wage increases to $4.58 per hour. Sets increases for 2016, 2017, and 2018, with annual increases beginning 2019.
Creates unemployment work-sharing program allowing an employer to temporarily reduce employees' work hours in lieu of layoffs with the state paying affected employees a percentage of unemployment insurance benefits.
Minimum wage increases to $9.47 per hour.
Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to 70% of minimum wage. Additional increase to occur in January 2016.
Employers are exempt from state maximum hours and overtime requirements (but not minimum wage) if 80% of employees are subject to federal law concerning maximum hours and overtime.
Paterson, New Jersey
Sick Leave Ordinance
Creates paid sick leave law.
Reductions in Force
Creates mini-WARN law.
Prince George's County, Maryland
Creates "ban-the-box" law for employers with 25 or more employees. Prohibits criminal inquiries, disclosures, and checks until after the first interview, unless an exception exists.
Expands disability discrimination law to apply to employers with four or more employees.
Increases the minimum wage to $8.75 per hour. Additional increase will occur in January 2016. Future increases will be based on inflation.
Allows people age 21 and older to possess up to one ounce of marijuana and up to six plants.
Restricts covered employers from asking about or using an applicant's criminal history record when making employment decisions.
Creates paid a sick leave law.
Establishes a minimum wage of $12.25 per hour. Regulates service charges in the hospitality industry.
Amends the required number of healthcare providers on the list of providers from which a worker can choose to seek medical treatment.
Ordinance No. 124490
Establishes a minimum wage, which varies based on employer size. Differentiates between hourly minimum wage and hourly minimum compensation. Set increases to occur in January 2016 through 2018 and/or 2025, depending on employer size.
OFCCP Rule Implementing Executive Order 13672
Implements Executive Order 13672, prohibiting discrimination based on sexual orientation and gender identity by contractors and subcontractors.
NLRB Rule Governing Representation Case Procedures
Revises union representation and election procedures under the National Labor Relations Act.
San Francisco, California
Ordinance No. 140687
Minimum wage increases to $12.25 per hour; sets yearly increases through 2018, with annual increases per cost-of-living increases beginning 2019.
Creates paid sick leave law. Also contains access to personnel file and recordkeeping requirements.
Mountain View, California
Establishes a minimum wage of $10.30 per hour. Annual increases to occur on January 1. Creates notice, posting, and recordkeeping requirements, and prohibits retaliation.
District of Columbia
Minimum wage increases to $10.50 per hour; for tipped employees, maximum tip credit increases to $7.73 per hour. Additional increase to occur on July 2016. Annual increases to occur beginning July 2017.
Ordinance No O2014-9680.
Establishes minimum wage that is the greatest of: state minimum wage; federal minimum wage; or $10.00 per hour. Established increases to occur in July 2016, 2017, 2018, and 2019. Annual increases to occur beginning July 2020. Sets tipped employee wage rates, and creates notice and posting requirements. Prohibits retaliation.
Minimum wage increases to $8.25 per hour; for tipped employees, maximum tip credit increases to $4.62 per hour. Training wage and wage paid to employees of amusement / recreational establishment also change.
Minimum wage may change; announcement due by April 1, 2015.
Prohibits using certain electronic devices while driving.
Legalizes recreational marijuana for people ages 21 and older.
Ordinance No. 20357
Minimum increases to $9.00 (adult) and $7.25 (minor) for large employers, $7.25 for small employers, and $7.50 for certain hotel employers. Additional increase will occur in August 2016. Annual increases will occur beginning January 2018. Also amends training wage.
Ordinance No. 7,352
Increases minimum wage to $11.00 per hour.
Bill 27-13 (2013)
Increases minimum wage to $9.55 per hour.
Bill 94-2013 (2013)
Increases minimum wage to $9.00 per hour; tipped employee minimum cash wage and maximum tip credit varies by type of tipped employee.
Tipped employee maximum tip credit increases and varies by type of tipped employee. Establishes increases to meal and lodging credit; uniform maintenance rates; and minimum salary requirement for exempt executive and administrative employees.
Creates increases to meal and lodging allowance; tips; uniform maintenance; and minimum salary requirement of exempt executive and administrative employees.
Creates increases to unit rate for janitors in residential buildings; minimum weekly wage; allowances for utilities; uniform maintenance rate; and minimum salary rate of exempt executive and administrative employees.
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