HR Administration | 

5 HR Compliance Trends to Watch in 2020

In 2019, states and local jurisdictions enacted dozens of laws that affect the way employers hire, pay, treat, and provide benefits to their employees. In addition, the federal government issued new regulations governing who may be classified as exempt from overtime. Given all the new laws designed to protect employees, here are five compliance trends to watch in 2020.

#1: More Leave Requirements

Paid Family Leave:

A growing number of jurisdictions are providing wage-replacement benefits when employees take leave for certain family or medical reasons. These paid family leave (PFL) programs are typically funded through payroll deductions. Some of these laws have express job-protection provisions that require employees returning from PFL to be reinstated to the position they held before the start of leave, or to a comparable/equivalent position. In other states, the PFL programs may only provide a financial benefit rather than a leave entitlement with job protection. However, even in states without express job-protection provisions, employees may be protected under another federal, state, or local law. In 2019, states continued to enact and expand family and medical leave laws and paid leave programs. Here's a summary of some recent changes:

  • California: Effective July 1, 2020, the maximum duration of paid family leave benefits will increase from six weeks to eight weeks.
  • Connecticut. Effective January 1, 2022, the state will expand its family and medical leave law to cover all private sector employers, ease eligibility rules, change the amount of leave available, and create a program that will provide wage-replacement benefits to employees who take leave for covered reasons.
  • New Jersey. The state expanded the New Jersey Family Leave Act (NJFLA), the New Jersey Security and Financial Empowerment (NJ SAFE) Act, and the New Jersey Temporary Benefits Disability Law (NJTDBL) to cover more employers and/or provide additional leave entitlements.
  • Oregon. Effective January 1, 2023, the state will give more employees the right to family and medical leave and provide eligible employees with wage-replacement benefits.

Additional jurisdictions with a paid family leave program include:

  • District of Columbia (benefits begin in July 2020)
  • Massachusetts
  • New York
  • Rhode Island (referred to as Temporary Caregiver Insurance)
  • Washington

All-Purpose Leave

In 2019, some states enacted laws requiring employers to provide paid time off that can be used for any reason. For example, effective January 1, 2021, Maine will require employers with more than 10 employees to provide their employees with paid time off. Nevada has a similar law (effective January 1, 2020) that applies to employers with 50 or more employees.

#2: New Harassment Prevention Requirements

In 2019, several states enacted or expanded sexual harassment prevention laws, including:

  • California. In 2018, California enacted Senate Bill 1343, which requires employers with five or more employees to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees, including seasonal and temporary workers. Previously, only California employers with 50 or more employees were required to provide sexual harassment training to supervisory employees. Employers with five or more employees generally have until January 1, 2021 to comply with the expanded training requirements (the training must be provided every two years).
  • Connecticut. Effective October 1, 2019, employers with three or more employees must provide at least two hours of sexual harassment training to all employees and supervisors. Smaller employers must provide at least two hours of sexual harassment training to all supervisors. Note: Connecticut already required employers with 50 or more employees to provide training to supervisors.
  • Illinois. Effective January 1, 2020, every employer with employees working in Illinois must provide annual sexual harassment prevention training. Bars and restaurants must also provide industry-specific training and adopt a written policy that meets certain requirements.
  • New York. Employers must provide a new notice to employees at the time of hire and at every annual harassment prevention training. The notice must contain the employer's sexual harassment prevention policy and information from the training program. Note: New York already required all employers to adopt a sexual harassment policy and training program that meets certain requirements.
  • Oregon. Effective October 1, 2020, the state will require employers to adopt a written policy for reducing and preventing discrimination, sexual harassment, and sexual assault.
  • Washington. Hotel, motel, retail, and security guard entities, as well as property service contractors, must adopt a policy against harassment and provide sexual harassment training. Hotels and motels with 60 or more rooms were required to meet the requirements by January 1, 2020. All other covered employers must meet the requirements by January 1, 2021.

Other states and local jurisdictions that require sexual harassment training include:

  • Delaware (employers with 50 or more employees)
  • District of Columbia (employers of tipped employees)
  • Maine (employers with 15 or more employees)
  • New York City (employers with 15 or more employees)

Other states and local jurisdictions that require a sexual harassment policy include:

  • California
  • District of Columbia (employers of tipped employees)
  • Maine (all employers)
  • Massachusetts (employers with 6 or more employees)
  • Rhode Island (employers with 50 or more employees)
  • Vermont (all employers)

#3: Expanding Discrimination Laws

States continue to enact laws that expand nondiscrimination protections for employees, applicants, and other workers. For example, some states have recently enacted protections against hairstyle discrimination and/or prohibit discrimination based on reproductive health decisions. Several states have also expanded their laws to cover smaller employers and/or cover non-employees, such as independent contractors.

While many states and local jurisdictions have laws with express protections from discrimination based on gender identity and sexual orientation, courts have disagreed about whether federal law offers the same protections. The U.S. Supreme Court is expected to rule on the issue later this year.

#4: Increased Equal Pay Protections

Many states have their own laws prohibiting pay discrimination. In the past few years, several states expanded the scope of their laws. For example, New York recently approved a law that expands the state's equal pay law to cover all protected classes from pay discrimination, not just sex. The amended law, which took effect October 8, 2019, also prohibits wage differentials between protected classes for substantially similar work.

In addition, more than a dozen states and several local jurisdictions have enacted laws that generally prohibit employers from asking applicants about their pay history and/or using it to make compensation decisions. These laws are intended to prevent discriminatory pay practices of a previous employer from continuing in new jobs.

#5: New Pay Rules

Overtime Exemptions:

The Fair Labor Standards Act (FLSA) requires covered employers to pay "non-exempt" employees at least the minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek. Some states require overtime pay in additional circumstances.

While most employees are non-exempt, the FLSA provides for exemptions from its minimum wage and overtime requirements for certain administrative, professional, executive, outside sales, and computer professional employees. These employees are known as "exempt" employees. To be considered exempt, employees must generally satisfy all three of the following tests:

  • Salary-level test: Employees must earn a weekly salary that meets the minimum requirements.
  • Salary-basis test: With very limited exceptions, the employer must pay employees their full salary in any week they perform work, regardless of the quality or quantity of the work.
  • Duties test: The employee's primary job duties must meet certain criteria.

Effective January 1, 2020, the minimum salary requirement for the administrative, professional (including the salaried computer professional), and executive exemptions from overtime under federal law increased from $455 per week to $684 per week (equivalent to $35,568 per year).

Some states are also revising their rules on who is exempt from overtime. For instance, in December 2019, the state of Washington's Department of Labor & Industries released a final rule that will increase the minimum salary required to be considered exempt from overtime under state law. The final rule also amends the state's duties tests for exemption. Several other states are considering changes as well, either through regulation or legislation.

In some states, the minimum salary requirement for exemption from overtime increases automatically whenever the minimum wage increases. This may have impacted employers in Alaska, California, Colorado, and Maine on January 1, 2020 and in New York on December 31, 2019.

Minimum Wage:

Twenty-one states and many local jurisdictions increased their minimum wage on January 1, 2020 or December 31, 2019. Several other locations will see their minimum wage increase at other times in 2020.

There have also been efforts to raise the federal minimum wage, which has been $7.25 per hour since July 2009. In 2019, the U.S. House of Representatives approved legislation that would have increased the federal minimum wage in increments until it reached $15 per hour in 2025, but the legislation hasn't been voted on by the Senate.

Conclusion:

There were a number of changes to employment laws and regulations in 2019 and we expect these trends to continue in the year ahead. Review your workplace forms, policies, and practices to ensure compliance with current applicable laws.

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