As could be expected in 2023, employers have had to adapt to an ever-changing landscape of employment laws, regulations, and in the case of the National Labor Relations Board (NLRB) a growing library of general counsel memoranda. Here’s a snapshot of several important employment law developments that employers should understand heading into the new year.
Show Me the (Minimum Wage) Money
We start with some minimum wage increases, which generally occur around the holiday season. States with new non-tipped minimum wage rates starting on January 1 include Alaska ($11.73); Arizona ($14.35); California ($16); Colorado ($14.42); Connecticut ($15.69); Delaware ($13.25); Hawaii ($14); Illinois ($14); Maine ($14.15); Maryland ($15); Michigan ($10.33); Minnesota ($10.85); Missouri ($12.30); Montana ($10.30); Nebraska ($12); New Jersey ($15.13); New York ($16); Ohio ($10.45); Rhode Island ($14); South Dakota ($11.20); Vermont ($13.67); and Washington ($16.28). Employers should also be mindful that a handful of states will raise minimum wage rates later in the year, including Florida ($13.00), Nevada ($12), and Oregon ($14.20).
As always, employers should be mindful of intrastate intricacies and need to check both state laws and city ordinances when setting policy. For example, in Colorado where the minimum wage will rise to $14.42 an hour, the city of Denver will increase its minimum wage to $18.29 an hour.
Vacation for All in the Windy City
Courtesy of the Chicago City Council, all employees performing at least 80 hours of work while physically present within the City of Chicago in any 120-day period will be entitled to 80 hours of paid time off. Originally slated for January 1, the City Council has pushed back the effective date of the policy to July 1. At that time, covered employees will be able to use up to 40 hours of paid sick leave and up to 40 hours of paid leave per year.
Despite the delay on this piece of the original ordinance, other pieces do become effective on December 31, 2023, such as the requirement that employers now provide covered employees in Chicago with at least 14-days’ notice when implementing changes to any employment policies. Additionally, all employees will need to be provided with the employer’s leave policies and comply with certain payout requirements (depending on company size) at the time of an employee’s separation from employment.
Expansion of Union Support at State and Federal Levels
As expected from the current administration, 2023 saw a wave of union-friendly activity from the NLRB as well as at the state level from the NLRB’s new Joint-Employer Rule to the repeal of Michigan’s right-to-work law. The repeal of Michigan’s right-to-work law will take effect on March 30 and allows for unions to bargain union security clauses for the first time in the state since 2012.
The NLRB’s Joint-Employer Rule (an article in itself) returns the NLRB’s determination of joint-employer status to that which was put in place during the Obama Administration. The Rule states that an employer is considered a joint-employer of another company’s employees if the two companies share or codetermine matters governing employees’ essential terms and conditions of employment. The NLRB also provided a list of those factors considered essential terms or conditions:
- Wages, benefits, and other compensation;
- Hours of work and scheduling;
- The assignment of duties to be performed;
- The supervision of the performance of duties;
- Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
- The tenure of employment, including hiring and discharge; and
- Working conditions related to the safety and health of employees.
To be clear, the Rule not only expands the definition of joint-employer, but also states that an employer does not even have to ever exercise such a control over any of the listed terms — simply the mere authority to do so is sufficient. This is the case even when such control is exercised indirectly. Additionally, these factors are not merely probative, rather each is individually determinative of a joint-employer relationship. Given the vagueness of the terms included in the Rule, it is expected to be met by immediate challenges once it takes effect.
In addition to other enhanced protections for the union side, the NLRB also revived the “quickie” election rules. These rules decrease the time for employers to defend against unionization efforts by shortening the time between the filing of the petition and the election. Among other timeline reductions, the rule decreases the time between the notice of pre-election hearing and hearing from 14 business days to eight calendar days and requires that elections are to be scheduled by regional directors at the earliest day practicable. Further, disputes over individual voting eligibility or bargaining unit inclusion will not be resolved before the election.
Pay and Privacy Protections
A few states jumped on the growing bandwagon of those expanding employee privacy protections and requiring pay transparency. Hawaii amended its existing equal pay law to include protected class discrimination and require that certain job listings disclose the hourly rate or salary range that reasonably reflects the actual expected compensation. Colorado amended its equal pay act to require posting of all job openings to employees to include salary range, benefit and other compensation applicable to the opportunity, and the date the application window is anticipated to close for each opportunity. On the privacy front, New York joins states such as Rhode Island in prohibiting employers from requesting or requiring that employees provide usernames, passwords, or access to their personal accounts (i.e., their LinkedIn and social media accounts). As a refresher, states that require salary range in some or all job postings include California, Illinois (effective January 1, 2025), New York, and Washington. States that have a variation of transparency include Connecticut (disclosure required prior to offer of compensation or upon request), Maryland (upon request), Nevada (at time of interview), and Rhode Island (upon request or before discussing an offer of compensation).
States and districts expected to pass pay transparency laws soon include the District of Columbia and Massachusetts. As is generally the case with employment laws, employers need to be cognizant of local ordinances when it comes to pay transparency as well: Jersey City, New Jersey; Ithaca, New York; New York City, New York; West Chester County, New York; Cincinnati, Ohio; and Toledo, Ohio are among those localities with their own individualized pay transparency requirements.
Major Crackdown on Child Labor
The Department of Labor (DOL) has informed its regional offices that the Wage and Hour Divisions will now issue fines related to child labor violations on a per violation basis as opposed to a per child basis. This drastically increases the potential penalties for employers found to have violated federal child labor laws and regulations. Under the old system, the maximum penalty for violations concerning one child was $15,138 regardless of the total number of individual violations relating to that child. The new rule eliminates that cap and allows for multiple fines per individual child with each reaching up to that maximum penalty. To assess penalties for each individual violation the DOL begins with the maximum penalty and then assesses the gravity factors: (i) repeated violations; (ii) willfulness; (iii) number of minors unlawfully employed; (iv) age of the minors and recordkeeping; (v) hazardous work; (vi) injury; (vii) duration of violation; and (viii) hours of employment. After an analysis of aggravating or mitigating gravity factors, the DOL then reviews the number of employees employed, the annual dollar value of sales or business, and the amount of capital investment and financial resources to determine the appropriate fine amount.
Two New Cannabis Measures
There are a couple updates on the marijuana front for 2024, including laws in California and Washington which take effect on January 1 which prohibit employers (with limited exceptions) from not hiring or penalizing employees for off-duty marijuana use and from drug-screening for non-psychoactive cannabis metabolites.
Don’t Forget About Video Call Compliance
Given the developments over the last few years it would be a disservice to not discuss the use of artificial intelligence (AI) in the workplace. One area which is commonly overlooked when it comes to the use of AI at work is the use of AI notetaking technology. With the daily use of video conferencing technology, many of us forget the fact that the recording of conversations is highly regulated by state law. While many of the technologies in use today provide notifications and require assenting to recording of meetings prior to joining the chat, that is not always the case with AI notetaking services. While AI notetaking services can be extremely useful as they can generate summaries, identify individual speakers, and create outlines, those utilizing such technology should remember that they need to comply with state requirements regarding notice and consent prior to doing so. Other potential considerations include data privacy regulations (depending on where such date is processed or stored), data security issues with privileged information in the event there is a data breach, and potential waiver of attorney client privilege depending on how notes generated are stored.
Conclusion
As employment laws continue to change, employers must routinely review their handbooks, policies and employment agreements to ensure compliance with all applicable federal, state and local laws. While our article illustrates some of the most interesting changes, the list is far from exhaustive. Employers must remember that ignorance of the law is never an excuse, and exercising these ounces of prevention can save you from needing pounds of cure.
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