New Year, New Laws: Compliance Challenges U.S. Employers Face in 2015

By Ilyse Schuman, Michael J. Lotito and Sebastian Chilco, © Littler Dec 15, 2014
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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.

Laws Effective Dec. 31, 2014

Jurisdiction

Item

Main Topic

Summary

New York

SB 2607 (2013)

Wage & Hour

Minimum wage increases to $8.75 per hour.

New York

Hospitality Wage Order

Wage & Hour

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.

New York

General Wage Orders

Wage & Hour

Provides increases to meal and lodging allowance; tips; uniform maintenance; and minimum salary requirement of exempt executive and administrative employees.

New York

Building Services Wage Order

Wage & Hour

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.

Laws Effective Jan. 1, 2015

Jurisdiction

Item

Main Topic

Summary

Arizona

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $8.05 per hour.

Arkansas

Issue 5 (Minimum Wage Initiative)

Wage & Hour

Minimum wage increases to $7.50 per hour, with increases in January 2016 and 2017.

California

AB 2617

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.

California

SB 1034

Benefits

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.

California

AB 2047

Civil Procedure

Clarifies that the statute of limitations for liquidated damages for various labor code violations is the same as that for the underlying violation.

California

AB 1897

Contingent Workforce

Provides that a client-employer is jointly liable with the labor contractor for wage and hour and workers' compensation law violations.

California

AB 1443

Discrimination

Extends anti-discrimination and harassment protections to interns and volunteers, and broadens categories of programs subject to this prohibition.

California

AB 1660

Discrimination

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.

California

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.

California

AB 2536

Leaves of Absence

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.

California

AB 1710

Privacy

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.

California

SB 1131

Taxation

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.

California

SB 1306

Various

Permits same-sex marriage, and recognizes out-of-state same-sex marriages.

California

SB 1360

Wage & Hour

A required rest or recovery period is counted as hours worked.

California

Exempt Computer Software Employee Pay Requirements

Wage & Hour

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.

California

Exempt Licensed Physician & Surgeon Pay Requirements

Wage & Hour

Physicians and surgeons are exempt from overtime if their hourly rate of pay is at least $75.19.

California

AB 2751

Whistleblowing

Increases whistleblower retaliation penalties. Creates a private right of action for unfair immigration-related practices. Amends immigration-related discrimination protections.

California

AB 1634

Workplace Safety

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.

California

AB 2053

Workplace Safety

Expands AB 1825 training requirements to mandate training about preventing "abusive conduct."

California

AB 326

Workplace Safety

Amends serious injury or death reporting requirements to include email.

California (Richmond)

Ordinance 11-14

Wage & Hour

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)

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $11.05 per hour.

Note: An additional increase will take effecton May 1, 2015.

California (San Jose)

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $10.30 per hour.

California (Sunnyvale)

Ordinance No. 3047-14

Wage & Hour

Establishes a minimum wage of $10.30 per hour; yearly increases are thereafter based on the consumer price index.

Colorado

Minimum Wage Order 31

Wage & Hour

Minimum wage increases to $8.23 per hour, and tipped employee minimum cash wage to $5.21 per hour.

Colorado

SB 5

Wage & 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.

Connecticut

HB 5269

Leaves of Absence

Amends how employer coverage is determined under paid sick leave law. Adds prohibitions.

Connecticut

SB 32

Wage & Hour

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.

Delaware

HB 294

Recordkeeping

Addresses how to dispose of certain records when the employer no longer retains them.

Delaware

HB 295

Recordkeeping

Addresses destruction of documents containing personal information.

Delaware

SB 6

Wage & Hour

Minimum wage increases to $8.25 per hour.

Florida

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $8.05 per hour, and tipped employee minimum cash wage increases to $5.03 per hour.

Hawaii

SB 2609

Wage & 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.

Illinois

HB 5701

Background Checks

Restricts employers' use of criminal background checks on job applicants, unless an exception exists.

Illinois

HB 8

Discrimination

Prohibits discrimination based on pregnancy. Requires reasonable accommodation of pregnant employees. Includes notice and posting requirements.

Illinois

HB 4157

Discrimination

Extends sexual harassment and sexual harassment retaliation protections to interns.

Illinois

HB 5622

Wage & Hour

Permits wage payment via payroll debit card if certain requirements met.

Maine

Announcement re: Withholding & Reporting

Taxation

Implements quarterly income tax and unemployment reporting system. Creates new forms.

Maryland

HB 295

Wage & Hour

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

Background Checks

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.

Massachusetts

SB 2195

Wage & Hour

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.

Minnesota

HF 779

Benefits

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.

Minnesota

HF 2576

Civil Liability

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.

Missouri

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $7.65, and tipped employee minimum cash wage increases to $3.83.

Montana

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $8.05 per hour.

Nebraska

Initiative 425

Wage & Hour

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.

Nebraska

LB 765

Wage & Hour

Allows wage payment via payroll debit card if requirements met.

New Hampshire

SB 207

Discrimination

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.

New Jersey

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $8.38 per hour.

New Mexico (Las Cruces)

Ordinance No. 2726

Wage & Hour

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.

Ohio

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $8.10 per hour, and tipped employee minimum cash wage increases to $4.05 per hour.

Oregon

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $9.25 per hour.

Rhode Island

S 2249

Wage & Hour

Minimum wage increases to $9.00 per hour; for tipped employees, maximum tip credit increases to $6.11 per hour.

South Dakota

Measure 18

Wage & 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.

Tennessee

SB 1808

Privacy

Restricts employer access to applicant and employee social media information and accounts, unless an exception exists.

Texas (Austin)

Ordinance No. 20140828-041

Workplace Safety

Prohibits use of portable electronic devices while operating a motor vehicle.

United States

IRS, HHS & EBSA Final Regulations re Excepted Benefits for Dental, Vision, & EAPs

Benefits

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.

United States

Executive Order 13658

Government Contractors

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.

United States

Affordable Care Act's Shared Responsibility Provision

Healthcare

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.

United States

IRS Rev. Proc. 2014-30.

Taxation

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.

United States

OSHA Final Rule re 29 C.F.R. part 1904

Workplace Safety

Updates list of industries that are partially exempt from OSHA recordkeeping requirements. Expands the types of work-related injuries that must be reported.

Vermont

HB 552

Wage & Hour

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.

Virginia

SB 110

Unemployment

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.

Washington

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $9.47 per hour.

West Virginia

HB 4283

Wage & 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.

West Virginia

HB 201

Wage & Hour

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.

Laws Effective Jan. 7, 2015

Jurisdiction

Item

Main Topic

Summary

Paterson, New Jersey

Sick Leave Ordinance

Leaves of Absence

Creates paid sick leave law.

Laws Effective Jan. 15, 2015

Jurisdiction

Item

Main Topic

Summary

Vermont

HB 758

Reductions in Force

Creates mini-WARN law.

Laws Effective Jan. 20, 2015

Jurisdiction

Item

Main Topic

Summary

Prince George's County, Maryland

CB-078-2014

Background Checks

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.

Laws Effective Jan. 31, 2015

Jurisdiction

Item

Main Topic

Summary

Delaware

SB 185

Discrimination

Expands disability discrimination law to apply to employers with four or more employees.

Laws Effective Feb. 24, 2015

Jurisdiction

Item

Main Topic

Summary

Alaska

Measure 3

Wage & Hour

Increases the minimum wage to $8.75 per hour. Additional increase will occur in January 2016. Future increases will be based on inflation.

Alaska

Measure 2

Workplace Safety

Allows people age 21 and older to possess up to one ounce of marijuana and up to six plants.

Laws Effective March 1, 2015

Jurisdiction

Item

Main Topic

Summary

New Jersey

SB 2124

Background Checks

Restricts covered employers from asking about or using an applicant's criminal history record when making employment decisions.

Laws Effective March 2, 2015

Jurisdiction

Item

Main Topic

Summary

Oakland, California

Measure FF

Leaves of Absence

Creates paid a sick leave law.

Oakland, California

Measure FF

Wage & Hour

Establishes a minimum wage of $12.25 per hour. Regulates service charges in the hospitality industry.

Laws Effective April 1, 2015

Jurisdiction

Item

Main Topic

Summary

Colorado

HB 1383

Workers' Compensation

Amends the required number of healthcare providers on the list of providers from which a worker can choose to seek medical treatment.

Seattle, Washington

Ordinance No. 124490

Wage & Hour

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.

Laws Effective April 8, 2015

Jurisdiction

Item

Main Topic

Summary

United States

OFCCP Rule Implementing Executive Order 13672

Discrimination

Implements Executive Order 13672, prohibiting discrimination based on sexual orientation and gender identity by contractors and subcontractors.

Laws Effective April 14, 2015

Jurisdiction

Item

Main Topic

Summary

United States

NLRB Rule Governing Representation Case Procedures

Labor-Management Relations

Revises union representation and election procedures under the National Labor Relations Act.

Laws Effective May 1, 2015

Jurisdiction

Item

Main Topic

Summary

San Francisco, California

Ordinance No. 140687

Wage & Hour

Minimum wage increases to $12.25 per hour; sets yearly increases through 2018, with annual increases per cost-of-living increases beginning 2019.

Laws Effective July 1, 2015

Jurisdiction

Item

Main Topic

Summary

California

AB 1522

Leaves of Absence

Creates paid sick leave law. Also contains access to personnel file and recordkeeping requirements.

Mountain View, California

File 14-341

Wage & Hour

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

B20-459

Wage & Hour

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.

Chicago, Illinois

Ordinance No O2014-9680.

Wage & Hour

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.

Maryland

HB 295

Wage & Hour

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.

Massachusetts

Question 4

Leaves of Absence

Creates paid sick leave law.

Nevada

2015 Minimum Wage Determination

Wage & Hour

Minimum wage may change; announcement due by April 1, 2015.

New Hampshire

HB 1360

Workplace Safety

Prohibits using certain electronic devices while driving.

Oregon

Measure 91

Workplace Safety

Legalizes recreational marijuana for people ages 21 and older.

Eugene, Oregon

Ordinance No. 20357

Leaves of Absence

Creates paid sick leave law.

Laws Effective Aug. 1, 2015

Jurisdiction

Item

Main Topic

Summary

Minnesota

SB 1775

Wage & Hour

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.

Laws Effective Oct. 1, 2015

Jurisdiction

Item

Main Topic

Summary

Berkeley,

California

Ordinance No. 7,352

Wage & Hour

Increases minimum wage to $11.00 per hour.

Montgomery County,

Maryland

Bill 27-13 (2013)

Wage & Hour

Increases minimum wage to $9.55 per hour.

Prince George's County, Maryland

Bill 94-2013 (2013)

Wage & Hour

Increases minimum wage to $9.55 per hour.

Laws Effective Dec. 31, 2015

Jurisdiction

Item

Main Topic

Summary

New York

SB 2607 (2013)

Wage & Hour

Increases minimum wage to $9.00 per hour; tipped employee minimum cash wage and maximum tip credit varies by type of tipped employee.

New York

Hospitality Wage Order

Wage & Hour

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.

New York

General Wage Orders

Wage & Hour

Creates increases to meal and lodging allowance; tips; uniform maintenance; and minimum salary requirement of exempt executive and administrative employees.

New York

Building Services Wage Order

Wage & Hour

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.

Ilyse Schuman, co-chair of Littler's Workplace Policy Institute® (WPI™), is a shareholder in the Washington, D.C. office; Michael Lotito, co-chair of the WPI, is a shareholder in the San Francisco office; and Sebastian Chilco is a research attorney in the San Francisco office. Littler's WPI is devoted to developing and influencing workplace legislative and regulatory developments at the
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