Compliance Corner [June 2024]
Here is what is new in June
Compliance Isn’t Confined to the Office
Regulations on Parade
California Workplace Violence Prevention Programs Due July 1
What (If Anything) Do You Need to Change to Navigate the Noncompete Ban?
New Obligations for New York Employers
Other Legal Actions
Montgomery County, MD Minimum Wage Increases Announced
Compliance Isn’t Confined to the Office
With the marked increase in the number of employees working remotely, employers are reminded that certain compliance requirements still apply. Examples include non-discrimination, anti-harassment, wage and hour, and leaves of absence. The following states have the listed requirements in place to provide interactive training in sexual harassment to employees plus additional training for supervisors:
California (5 or more employees anywhere in the country –at least 1 in CA) plus special supervisor training)
Connecticut (3 or more employees anywhere in the country – at least 1 in CT)
Delaware (50 or more employees in Delaware plus special supervisor training)
Illinois (all employees, regardless of size or employer location – including out-of-state)
Chicago (all employees working in Chicago: 1 hour of prevention training for all employees, 1 additional hour of training for supervisors, & 1 hour of bystander training for all employees)
Maine (15 or more employees in Maine plus special supervisor training)
New York (all employers, regardless of size, covers all employees working at all in New York)
New York City (all employees, including part-time employees, short-term employees, interns and/or independent contractors who work more than 80 hours in a year and for at least 90 days). For purposes of determining employer coverage under the law, independent contractors – regardless of the number of days or hours they work – are counted toward the 15-employee threshold)
Regulations on Parade
According to online sources, employers have a lot to look forward to this summer in terms of regulatory actions coming out of the federal government.
In summary:
The new Independent Contractor Rule from DOL has been put into effect, to the consternation of many employers, who (along with SHRM and other organizations) accuse the rule of being confusing, unclear and potentially disadvantageous to independent workers.
As noted last month, the exemption salary threshold is to increase to $44,000 in July and $59,000 next January – if it succeeds through the legal challenges that are being brought.
Implementation of the proposed Joint Employer Rule has been stopped for the time being by a judge in Texas, but the Democrat majority on the NLRB will keep trying to please their union sponsors.
The DOL and Wage-Hour Division have issued guidance on the handling of FMLA, FLSA and other regulated labor matters by employers who implement AI systems. The primary thrust is that humans are responsible for ensuring that the output from those systems is in compliance with the respective laws.
DOL has also finalized a new final rule governing retirement security; it will become effective September 23, 2024. It is the first update in a half-century and is designed to protect workers from overcharges and advice that is not in their best interest (as opposed to that of the employer).
The FTC ban on non-competes is scheduled to be effective September 4, 2024, as previously noted. See more below.
The IRS has updated HSA definitions and requirements for 2025:
Contribution caps for employees in high-deductible health plans (HDHPs): will be will be $4,300 for single employee coverage and $8,550 for family coverage.
As part of that update, the definition of and HDHP specifies that the deductible for single coverage must be at least $1,650, and that for family coverage it will be $3,300.
Finally, the out-of-pocket limit will be $8,300 for single coverage and $16,600 for family coverage.
California Workplace Violence Prevention Programs Due July 1
Employers in California must have in place a detailed, written and accessible plan to ameliorate possible violence in the workplace. The required contents of the plan are very specific and must include the following:
Names or job titles of those responsible for implementation, plus their role in execution of the plan.
Effective procedures to obtain the active involvement of employees and authorized employee representatives in developing and implementing the plan, including proactive measures.
Methods the employer will use to coordinate implementation of the plan with other employers, when applicable, including training.
And a multitude of other requirements, too numerous to list here. A model template is available at https://www.dir.ca.gov/dosh/dosh_publications/Model-WPV-Plan-general-Industry.docx
What (If Anything) Do You Need to Change to Navigate the Noncompete Ban?
With employees becoming more difficult to find, retention is likewise becoming more important to employers. This is especially true in the technology sector, although it is becoming more difficult in the blue-collar arena as well. Online sources offers the following advice:
View retention as an opportunity to focus on employee satisfaction and loyalty to the company, as well as finding alternate language to protect what is vital to the company. The focus here would be on the protection of intellectual property, which is not banned. The advice is to have “robust intellectual property clauses” in hiring agreements. Use of non-solicitation clauses is also still permissible.
Additionally, work to develop (or maintain) a positive workplace environment, where communication is open and non-threatening, and people feel valued and appreciated. Making career growth opportunities available may be difficult in a small organization, but the opportunity for talent enhancement (e.g., via educational assistance) can still be attractive to employees and candidates.
Competitive benefit offerings include flexible working conditions, health and wellness programs, family-friendly leave policies, perhaps bonus programs, and other “out-of-the-box” offerings.
Effective communication is always a key component to organizational success – especially when change is involved. If employees currently have non-compete agreements, they must be informed – but it should be done in a positive, constructive, thorough manner, especially if an intellectual property clause is being introduced instead. Follow-up communication – both formal and informal – must be maintained to show employees that the management team is genuinely concerned with their well-being. That includes top management “walking the floor” and being available to employees.
New Obligations for New York Employers
If you have employees in New York State, you need to be aware that new employment laws are going to take effect over the course of the coming year(s). If you don’t, but have employees in another “blue” state, you might want to check this out as well. If neither applies, you can skip to the next article.
Paid prenatal personal leave (also noted last month)– up to 20 hours of paid leave in addition to state-mandated paid leave for pregnancy-related healthcare.
Paid lactation breaks – up to 30 minutes each time an employee has a “reasonable need” to express milk. If more than 30 minutes is needed, the employee may take meal time or other paid leave time. This leave for up to three (3) years following the birth of a child.
Any remaining unused COVID-19 leave can be rescinded on July 31, 2025.
“Freelance Isn’t Free” Act: Same as NYC, contracts with independent contractors must be in writing if the value is $800, either all at once or within a 120-day period. Not to get too deeply into the weeds, “Freelancers” are defined as individuals regardless of business status, and “Hiring Entities” are anyone who hires them. Freelancers can sue hiring entities, and so can the state attorney general. Records must be kept for six years. (Illinois has just passed a similar law, the “Freelance Worker Protection Act,”)
Employers with New York City employees must (1) give all workers a copy of the NYC “Workers’ Bill of Rights” and (2) post a new “Bill of Rights” poster in a readily visible location.
Be ready to drop non-compete agreements on or before September 4.
Comply with state and city pay transparency laws in all postings, including on job boards. Note that ranges must be realistic: NYC has filed complaints against employers that post excessively wide ranges (e.g., $31k - $125k for a reporter).
Other Legal Actions
An international law firm based in DC has settled a data breach case for $8 million. Over 600,000 people were affected.
The Illinois BIPA (see p.2) in the news again: White Castle in Illinois is on the verge of a class settlement on behalf of employees who “used a finger-scanning device in the course of their employment without first executing White Castle’s Biometric Information Privacy Team Member Consent Form during the Class Period from December 6, 2013 to October 15, 2018.”
Also in Illinois, a BIPA lawsuit against LexisNexis was dismissed; the suit had three aspects: (1) Fraud and Deceptive Practices, (2) “unjust intrusion upon seclusion” (not defined), and (3) a declaratory judgement. The court dismissed the first aspect for 3 reasons, the second for 2 more reasons, and the third for lack of substance.
Montgomery County, MD Minimum Wage Increases Announced
Effective July 1, 2024, employers with 51 or more employees in Montgomery County must pay a minimum wage of $17.15 per hour. Employers with 11-50 employees must pay at least $15.50 per hour.
A new poster will be required in either case, although it may not yet available.