HR, Benefits, and Payroll Compliance Monthly Roundup
Federal
DOL Clarifies Pay Requirements for Tipped Employees with Dual Jobs
The Department of Labor (DOL) recently passed a rule in October regarding tipped employees. Effective December 28, 2021, the rule will now clarify that employers may only take a tip credit for tipped employees when these employees are performing work that is part of their tipped occupation, unless the work is for a substantial amount of time.
Tip-producing work: Any work performed by a tipped employee that provides service to customers in which the employee receives tips.
Directly supporting work: Work performed by a tipped employee in preparation for or to assist tip-producing work.
Substantial amount of time:
- At least 20% of the hours in the workweek for which the employer has taken a tip credit
- A continuous period of at least 30 minutes
DOL Announces Rule to Increase Federal Contractor Minimum Wage
Effective January 1, 2022, Executive Order 13658 will increase the Federal Contractor minimum wage to $11.25 per hour per. On January 30, 2022, Executive Order 14026 will increase the Federal Contractor minimum wage again to $15.00 per hour. The Department of Labor has published a comparison chart of FAQs for the two executive orders to assist employers negotiations with both new and existing contracts.
DOL, NRLB and EEOC Announce Joint Initiative Against Workplace Retaliation
In an effort to minimize the increase in harassment claims, the Department of Labor (DOL), National Labor Relations Board (NLRB), and the Equal Employment Opportunity Commission (EEOC) have joined forces. It is important to note that there are no employer obligations following this mandate. However, the following initiatives are being rolled out by the participating agencies:
- Educating the public about worker rights and unlawful retaliation;
- Initiating a virtual dialogue with employers, trade and business associations, labor organizations and civil rights groups about the importance of employee anti-retaliation protections; and
- Forcefully protecting workers from retaliatory acts.
Alabama
Alabama Law Requires Employers to Allow Religious and Medical Exemptions to any Vaccine Mandate
The Alabama Department of Labor enacted Senate Bill 9 that requires AL employers to exempt vaccination as a condition of employment for any employee who completes and submits an exemption form. An employee may apply for an exemption for a medical reason or a bona fide religious reason.
Employers who deny an employee’s application must allow the employee an appeal process. Senate Bill 9 establishes an emergency rule where the employee can file an appeal with the appointed Administrative Law Judge (ALJ).
An employer may not terminate an employee whose request has been denied until at least seven days have passed, or the appeal process has concluded, if applicable. Any working time that an employee misses as a result of this process shall be paid by the employer at the employee’s regular rate of pay.
Arizona
Tucson, Arizona Passes Minimum and Living Wage Ordinance with Reporting Pay, Wage Payment and Retaliation Provisions
Effective April 1, 2022, Proposition 206: The Tucson Minimum Wage Act will move the city’s minimum wage to $13.00 per hour. The following increases will take place as part of the Act:
- $13.50 per hour on January 1, 2023
- $14.25 per hour on January 1, 2024
- $15.00 per hour by January 1, 2025
Eligible employees will include those who are working five or more hours within the city’s geographical area. All employers who operate within the city’s geographical limits will need to comply with the Act. State, federal, and tribal entities are excluded from the Act.
The Act further clarifies the following additional wage and pay regulations:
- Employers are prohibited from mandating their employees to receive wages on a payroll card.
- Employers must ensure employees are receiving at least the minimum hourly wage after all deductions have been accounted for.
- Employers averaging 26 or more employees must pay an employee for a minimum of three hours if the employer engages the employee to work. In addition, employers must pay an employee for three hours if the employer cancels their shift with less than 24 hours’ notice.
Employees may file complaints of adverse action under the Act within 90 days after the violation occurs.
Arkansas
Vaccine Mandate Law Requires Exemption Process
Arkansas has enacted a law requiring employers that mandate the COVID-19 vaccination to provide an exemption process for employees. The exemption process allows unvaccinated employees to provide either:
- A negative antigen test result or molecular diagnostic test result once a week
- Proof of immunity to the virus, which includes the presence of antibodies
These tests must be approved by the guidelines provided in the Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency. The employer is not responsible for covering any costs associated with these tests.
California
California Pay Data Reporting Approaching
In September 2020, California implemented the California Pay Data Reporting legislation in an effort to reduce gender and racial pay gaps. It is the time of year again where qualified employers subject to California Pay Data Reporting need to file their employee pay data no later than March 31, 2022. To read our full summary, see our e-Alert: California Pay Data Reporting Approaching.
Notice and Reporting Requirements Amended for COVID-19
Effective October 5, 2021, Assembly Bill 654 was approved to amend Cal/OSHA’s COVID-19 rules and regulations.
When a COVID-19 outbreak occurs in the workplace, employers must notify all individuals who were exposed to the outbreak within one business day, and the local public health agency within 48 hours.
An outbreak of COVID-19 can be confirmed by any of the following scenarios:
- A lab-confirmed case of COVID-19
- A positive COVID-19 test from a licensed health care professional
- An order to isolate from a public health official for COVID-19 reasons
- A COVID-19-related death
Community clinics, adult day health centers, community care facilities, and child day-care facilities are exempt from these reporting requirements. The bill amends the uninterrupted utilities list to include renewal natural gas sources; COVID-19 outbreaks may not interfere with services provided to the public.
In addition to notifying close contacts, employers must also notify anyone who was at the same worksite as the confirmed case. The list of exempt facilities has been expanded to include community care facilities and clinics, intermittent clinics, tribal clinics, outpatient tribal organizations, rural health clinics, federally qualified health centers, chronic dialysis centers, health care service employers, adult day health centers, home health agencies, pediatric day health facilities, hospices, residential care facilities for the elderly and/or terminally ill, and child day-care facilities.
This law will remain in effect through January 1, 2023. To read our full summary, see our e-Alert: Two New California Laws Make Significant Changes to Employer Safety and Health Obligations
California Updates ABC Test Exemptions
Effective January 1, 2022, California will designate the following professions as exceptions to the ABC Test:
- Licensed Manicurists: Already exempted under the existing law, this exemption has been extended to January 1, 2025.
- Construction Trucking Services: Already exempted under the existing law, this exemption has been extended to January 1, 2025.
- Data Aggregators: The amended law clarifies this exemption to apply to the association between a data aggregator and a “research subject” if certain conditions are satisfied. The condition includes that any consideration paid for the feedback provided, if prorated to an hourly rate, should be equal to or greater than minimum wage.
- Insurance-related Services: The amended law expands this already exempted category to include claims adjustors and third-party administrators of claims within the insurance and financial service industries.
- Manufactured Housing Salespersons: Existing law exempts a manufactured housing salesperson from the ABC test, subject to the legal obligations governing the occupation. The update clarifies that employers should not consider the statutorily imposed duties of a manufactured housing dealer as considerations in the multifactor test.
To read our full summary, see our e-Alert: California Updates ABC Text Exemptions
Data Security Breach Notification Amended Law to Cover Genetic Data
Effective January 1, 2022, California will expand the list of personal information to include genetic information. If genetic information is exposed with an individual’s first and last name during a data breach, the company holding the data must report the breach. Genetic information is any data that contains biological samples from an individual (e.g., DNA, RNA, genes, and chromosomes).
Warehouse Distribution Centers Required to Provide Written Descriptions of Quotas at the Time of Hire
Effective January 1, 2022, warehouse distribution centers in California will need to provide employees with a work quota within 30 days of the employee’s hire date. For existing employees, work quotas will need to be provided within 30 days of January 1, 2022.
The work quota must define the amount of work that is expected to get done, the time frame the work is expected to be completed by, and any disciplinary actions that will take place if the quota is not met by the time frame. It is important to note that employers are to create these quotas while still allowing for their workforce to take appropriate rest and meal breaks, as well as maintain safety guidelines throughout the worksite.
California Announces 2022 Salary Level for Computer Software Employee Exemption
Under California’s Division of Labor Standard Enforcement (DLSE), computer software employees are exempt from the state’s overtime pay requirements if they meet all the requirements for the exemption. One of the criteria is that the employee’s hourly rate is not less than the predetermined rates outlined by the Department of Industrial Relations. Each October, the DLSE publishes rates in the California Consumer Price Index (CCPI) to be effective on January 1 of the following year.
To read our full summary, see our e-Alert: California Announces 2022 Salary Level for Computer Software Employee Exemption.
Colorado
Colorado Amends Minimum Wage, Overtime and Wage Payment Laws
Effective January 1, 2022, Colorado’s Overtime and Minimum Pay Standards (COMPS) will increase the state’s minimum wage to $12.56 per hour, and $9.54 per hour for tipped employees. COMPS Order 38 provides the updated thresholds for overtime exemptions.
Colorado’s Wage Protection Act has been amended to clarify that any accrued, unused vacation time must be paid to an employee if they separate from the company.
Proposed Definition of Vacation Pay Extended, Modifications to Paid Sick Time Calculations, and New Highly Compensated Employee Exemption
Colorado’s Department of Labor is proposing that PTO be included in the definition of vacation time as it pertains to use-it-or-lose-it policies. This comes after the Neito vs. Clark’s Market Supreme Court decision. If finalized, PTO could not be forfeited, mandating employers to allow for rollover from year to year, or a payout of unused time if the employee separates from the company.
The Colorado Paid Sick Leave Law is proposing that the weighted average calculation for awarding hours to employees be expanded to the past 30 days, instead of the past workweek. The proposal clarifies how many hours of leave should be provided to an employee who works a shift that does not have a set number of hours to complete a task, stating that in these scenarios, it would fall to the employer’s discretion.
The Colorado Overtime and Minimum Pay Standards (COMPS) Order #38 proposes that the overtime threshold for highly compensated employees be moved from $107,432 to $101,250. Direct support professionals who work shifts of at least 24 hours for an agency that receives at least 75% of their revenue from Medicaid would be added as an additional exemption category.
The order also proposes that employees who are working more than one nonexempt position at different rates for the same company would be subject to the weighted average rate between both positions should overtime occur.
Lastly, the order proposes that salary thresholds be removed from the order and published annually as a stand-alone document with adjusted labor compensation statistics.
Washington, D.C.
D.C. Passes COVID-19 Vaccination Leave, Extends Other COVID-19 Employee Leave
On November 18, 2021, Washington, D.C. passed the COVID Vaccination Emergency Leave Amendment Act of 2021, which extends the public health emergency leave available under the DC Family Medical Leave Act and establishes new COVID-19 paid vaccine leave requirements until February 16, 2022. Employers must provide up to two hours of paid leave to obtain a COVID-19 vaccine for themself or their child and 8 hours to recover during the 24-hour period following the vaccine.
In addition, employees may take an additional 16 weeks of unpaid public health emergency leave for COVID-19-related reasons through February 16, 2022.
Washington, DC, Makes Updates to DCFMLA for 2022
In 2020, the District of Columbia extended their paid and unpaid leave benefits to workers. There are two leaves available in the District, the DC Family and Medical Leave Act (DCFMLA) and the DC Paid Family Leave (DCPFL). Both leaves stem from the Universal Paid Leave Amendment Act of 2016, enacted to provide covered employees with certain amounts of paid leaves throughout the year.
To read our full summary, see our e-Alert: DCFMLA Updates.
Illinois
Illinois Enacts Pay Data Reporting
Illinois enacted SB 1480 and SB 1847, which amended various laws including the Illinois Equal Pay Act. On June 25, 2021, Governor Pritzker signed SB 1847 into law, which further amended the Act (“Recent Amendments”). To read our full summary, see our e-Alert: Illinois Pay Data Reporting.
Illinois Governor Gives Employers Greater Authority to Impose COVID-19 Requirements as a Condition of Employment
Effective June 1, 2022, Illinois Senate Bill 1169 will amend the Illinois Health Care Right of Conscience Act. The senate bill reminds the public of the original intent of the Act; to protect medical practitioners from adverse action if they refuse to perform a medical procedure due to ethical conflict. The most common example of this is an abortion.
The senate bill clarifies that facilitating COVID-19 vaccinations to those who do not wish to receive one, does not fall under this context of the bill.
Iowa
Iowa Requires Exemptions from Employer Vaccine Mandates
Employers operating in the state of Iowa are starting to mandate COVID-19 vaccinations as a condition of employment; in response, the state passed House File 902 on October 29, 2021 requiring employers to allow employees to apply for a medical or religious exemption. And further, if an employee is dismissed from their position because they have failed to comply with this condition of employment, the employee’s unemployment benefits will not be affected.
Kansas
City of Wichita, Kansas, Enacts Antidiscrimination Ordinance
The Wichita Human Rights Commission has been established as part of the new ordinance that prohibits employers from discrimination.
- “Employers” are defined as any individual or entity doing business in the city of Wichita with four or more employees for each working day in 20 or more calendar weeks per year.
- Religious organizations are exempt from this law.
The ordinance prohibits employment discrimination in the form of refusing to hire, employ, discharge, or otherwise discriminate against employees based on a protected class.
Protected classes also include “age, color, disability, familial status, gender identity, genetic information, national origin or ancestry, race, religion, sex, sexual orientation, or military or veteran status.”
Employees that allege violations of this law may file a written complaint within 180 days of the incident with the city clerk.
New Jersey
New Jersey Rolls Back Temporary Suspension of Employer Withholding Rules for Remote Employees
As of October 1, 2021, New Jersey ended the temporary relief period regarding employers’ obligations to withhold income tax for remote or teleworking employees who work in New Jersey. What this means is that employers must stop withholding income taxes on the employer’s jurisdiction and instead, withhold and file based on where the employee works. By way of background, under New Jersey law, income is sourced to the state based on where the work is performed.
During the pandemic, the rules were lifted to reflect the realities of working from home. For example, if an employee is working from home in New Jersey for a Rhode Island employer, the Rhode Island employer will likely need to withhold taxes in New Jersey. The caveat is that there may be state reciprocity agreements in place, such as New Jersey and Pennsylvania, so those would need to be considered.
New Jersey Expands Age Discrimination Law by Removing Age Cap
On October 5, 2021, the New Jersey legislature enacted amendments to its fair employment law that expands on age discrimination protections.
The amendments state that employers may no longer refuse to hire, promote, or force retirement on employees over 70 years of age.
In addition, formerly discharged employees now have all remedies available to file forced age-related retirement claims.
Finally, because of the amendments, institutions of higher education are now prohibited from requiring tenured employees to retire at age 70.
New York
New York Requires New Notice of Electronic Monitoring
Effective May 7, 2022, all New York employers will need to comply with the amended New York State’s Civil Rights Law. The amendment mandates that a notice of electronic monitoring be provided to and acknowledged by all employees at time of hire. It is important to note that, for current employees, this notice only needs to be provided and does not need to be signed, collected, and kept in an employee’s file.
For the purposes of this amendment, electronic monitoring is when an employer monitors any of the following activities on any device:
- Incoming and outgoing telephone calls,
- Incoming and outgoing e-mails, and/or
- Internet webpage browsing history.
New York Dramatically Expands Whistleblower Protections
Effective January 26, 2022, Section 740 of New York’s Labor Law will be expanded to include the following protections for Whistleblowers:
- An individual needs to reasonably believe the act in question violates the law, even if the act does not pose a public health and safety risk.
- An individual only needs to have a reasonable belief that there is a violation, they do not need to prove a violation.
- The act protects employees, former employees, and independent contractors.
Employees now have two years from the date the adverse action occurs to file a complaint. Employees must first bring the adverse action to their employer’s attention and allow adequate time for a response.
Employers are required to post notice of these amended protections for Whistleblowers.
New York State Issues Updated Model Workplace Safety Plans and FAQ Guidance Under the HERO Act
On September 23, 2021, New York updated its workplace safety plan model for employers complying with the Health and Essential Rights (HERO) Act. To read our full summary, see our e-Alert: New York State Issues Updated Model Workplace Safety Plans and FAQ Guidance Under the HERO Act.
New York COVID-19 Vaccine Leave Covers Booster Shots
The state Department of Labor has issued a frequently asked questions guide clarifying that the COVID-19 vaccination law passed in March of 2021 has been amended and now provides paid leave for vaccine booster shots.
New York City Laws Impose Significant New Limitations on and Requirements for Fast-Food Employers
The city of New York has passed both the Proposed Int. No. 1415-A and Proposed Int. No. 1396-A laws prohibiting fast-food employers from terminating, reducing hours by 15%, or suspending employees unless there is just cause to do so or a bona fide economical concern.
The laws provide that employers are required to adopt clear policies for standards of conduct and implement adequate training that matches the employer’s standards.
Additionally, employers must establish a progressive disciplinary action process and complete thorough investigations into job performance and misconduct. After an investigation is completed and employment is terminated, the employee must be provided with the precise reason for termination within 5 days.
The set standards for which employers may determine just cause for termination are as follows:
- Employer provided relevant and adequate training
- Employer consistently applied disciplinary action to employees and enforced policies, rules, or practices
- Employer carried out fair and objective investigation
- Employee knew or should have known the policy, rule, or practice
- Employee was in violation of policies, rules, or practices and committed misconduct
Definitions:
Progressive disciplinary action is defined as a “system that provides for a graduated range of reasonable responses to a fast-food employee’s failure to satisfactorily perform.” Employers must keep in mind that employees cannot be terminated unless they are allowed to demonstrate attempted behavioral corrections through a reasonable and consistent disciplinary process.
Bona fide economic reasons allow an employer to terminate or reduce hours due to a decrease in sales, production, or profit. However, a laid-off employee must be provided with the option of reinstatement prior to an employer onboarding a new hire.
Termination decision challenges allow an employee to file a claim in court. If it is found that the employer wrongfully terminated an individual, the employer could be subject to the following:
- Reinstatement or restoration of the employee’s original working hours
- Payment to the city for moving forward in arbitration
- Reasonable attorney’s fees and costs
- Ordering of all other appropriate equitable relief (Backpay, disciplinary rescission, etc.)
Important Notes: Employers will also be required to develop and implement consistent scheduling systems that provide a “predictable, regular set of reoccurring weekly shifts.” Reducing hours by more than 15% is prohibited unless agreed upon by the employee.
New York Amends Rules on Paid Family Leave to Clarify the Amount of Available Intermittent Leave
Effective January 1, 2022, New York amended its maximum amount of eligible intermittent leave time. Intermittent leave is defined as leave taken in daily, versus weekly, increments and is subject to the maximum eligible leave time of 12 weeks allowed under the law.
Previously, the rule indicated a maximum of 60 days; however, the amendment removes this language. Now the rule states that an employee’s maximum amount of eligible intermittent leave time is determined by multiplying the average number of days worked by 12 weeks.
For example, an employee who works an average of 3 days per week multiplied by 12 weeks provides a maximum of 36 days for the employee to take intermittent leave.
New York Construction Contractors Liable for Subcontractor Wage Claims
Beginning January 4, 2022, under the new law AB 3350, contractors and subcontractors will be held jointly liable for wage claims brought against their subcontractors. This applies to all new, renewed, modified, or amended contracts moving forward from January 4.
Definitions:
The term “construction contract” refers to “a written or oral agreement for the construction, reconstruction, alteration, maintenance, moving or demolition of any building, structure or improvement, or relating to the excavation of the development or improvement to land.”
The term “subcontractor” refers to any person or entity that is a “party to a contract with a contractor and/or a party to a contract with the contractor’s subcontractor at any tier to perform any portion of work within the scope of the contractor’s construction contract with the owner, including where the subcontractor has no direct privity of contract with the contractor.”
Employees and the state Department of Labor may now file unpaid wage claims against contactors and subcontractors. As a result, contractors that cover wage claims on behalf of a subcontractor can bring legal action of their own to recover any amount paid to satisfy wages. (Employees may only file claims for unpaid wages within three years prior to filing claim.)
Important Notes: Contractors may not waive liability by agreement or release unless via a bargaining agreement through a construction trade labor organization. Contractors also have the right under the law to request and inspect subcontractors’ wage payment records to ensure compliance. Contractors may withhold payments until records are provided.
New York to Expand Paid Family Leave to Cover Siblings
The New York paid family leave program provides up to 12 weeks of paid leave to care for a family member with a serious health condition or other covered reasons.
The paid family leave definition of family member as of January 1, 2023, will be “a child, parent, grandparent, sibling, spouse, or domestic partner.” The amendments state that sibling will be defined as a “biological or adopted sibling, half sibling, or step sibling.”
New York Amends Secure Choice Savings Program Expanding Employer Obligations
New York amended the program for covered employers to:
- Require automatic enrollment of employees and provide employees a choice to opt out.
- Clarify that employee information materials must include a disclosure that employees may opt out after they have been enrolled. The informational materials must also include a form for an employee to opt out or elect to participate with a level of employee contributions other than 3%.
- Require each participating employer to have a payroll deposit retirement savings arrangement that allows each employee to participate in the program at the most nine months after the program is open for enrollment. Further, participating employers must automatically enroll each of their employees who has not opted out using the form, provide payroll deduction retirement savings arrangements for employees, and deposit, on behalf of those employees, the funds into the program. Deductions from wages may not begin until the thirtieth day after the employee has been enrolled.
- Clarify that at least once every year, there must be a program enrollment period for employees who previously opted out.
- Amend the definition of a covered employer under the program to provide that in all times during the previous calendar year, an employer must have had at least 10 employees in the state and been in business for at least two years, as well as not offering a qualified retirement plan.
North Carolina
Mecklenburg County, Wake County, and Durham County, North Carolina Pass Antidiscrimination Ordinances
Anti-discrimination ordinances have been enacted in these three North Carolina counties establishing clear laws that prohibit employment discrimination based on a protected class in terms of tenure, promotion, transfer, compensation, or other employment conditions.
Texas
Texas Governor Greg Abbott Bars Employers and Individuals from Compelling COVID-19 Vaccine
On October 11, 2021, the Texas Governor issued an executive order stating that no entity can force individuals to receive the COVID-19 vaccination.
Individuals may object “for any reason of personal conscience, based on a religious belief, or for medical reasons including prior recovery from COVID-19.” This order establishes a criminal fine of $1,000 for any violations regarding vaccine mandates.
This order is in direct response to the Occupational Safety and Health Administration’s issuance of an Emergency Temporary Standard (ETS) mandating employers with 100 or more employees to require employees to be vaccinated or submit to weekly testing. The order states “COVID-19 vaccines are strongly encouraged for those eligible to receive one but must always be voluntary for Texans.”
Washington
Washington State Announces PFML Rates for 2022
Washington state’s Paid Family & Medical (PFML) program provides leave to employees who have worked a minimum of 820 hours during the qualifying period through an eligible employer(s). Washington PFML can be used when an employee is suffering from a serious medical condition that prevents them from working, for bonding with a new baby or child, or to care for a qualified family member suffering from a serious medical condition. The benefit and premium rates for Washington PFML will be updated on January 1, 2022. To read our full summary, see our e-Alert: Washington State Announces PFML Rates for 2022.
Washington Updates Salary Levels for Overtime Exemption
Washington state has updated the 2022 overtime pay threshold for white-collar exemptions. These exemptions are for professionals who predominantly perform executive, administrative, and professional (EAP) duties, including outside sales and computer workers.
To read our full summary, see our e-Alert: Washington Updates Salary Levels for Overtime Exemption.
West Virginia
West Virginia Requires Exemptions for COVID-19 Vaccine Mandates
West Virginia has enacted a law requiring covered employers that require COVID-19 vaccines to permit certain exemptions, including medical and religious reasons.
West Virginia Requires Exemptions for COVID Vaccine Mandates
Effective January 1, 2022, covered employers that require a COVID-19 vaccination must permit certain exemptions to the vaccine. “Covered employer” includes any business entity in West Virginia with at least one employee.
The following exemptions are allowed:
- Certification from a licensed physician or advanced practice registered nurse that has completed an in-person evaluation of the employee and determining:
- Vaccination would be contraindicated
- Specific precautions to the vaccination
- Individual has developed antibodies due to prior exposure, suffered from, or recovered from COVID-19
- Notarized certification as executed by the employee indicating religiously held beliefs preventing them from having the vaccination.
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