FEDERAL UPDATES

Exempt Salary Threshold:  As May approaches, we are continuing to hear about proposed changes to the exempt salary threshold, but for now there is little measurable progress to report.  While the “Restoring Overtime Pay Act” was recently introduced in Congress and would raise the exempt salary threshold to $45,000 per year, with annual increases that would eventually raise it to $80,000 by 2027, very few experts expect it to make much headway in this divided Congress.  Meanwhile, the DOL’s current regulatory agenda suggests that it is scheduled to issue a proposed increase in May, but the date has already been delayed several times.  The DOL proposal is loosely expected to be somewhere around $46,000 – $52,000 per year with possible periodic increases based on “market data”.  The Biden administration and worker advocacy groups are pushing for even higher limits, while others are opposed to a higher threshold under the theory that exempt workers appreciate the flexibility and not having to track their time.  The DOL has also hinted at additional changes to the duties tests but has not provided any concrete additional information or proposals. DOL’s prior attempts to raise the rate have been blocked by courts determining that the DOL lacked the authority to regulate the salary threshold, so even if the DOL meets the May deadline, any increase wouldn’t be effective until after the notice and comment period, and at least preliminary settlement of any legal challenges. 

Title VII Religious Accommodations:  This week the US Supreme Court heard oral arguments in a case where a religious accommodation was denied based on undue hardship.  Under longstanding existing law, the current standard for undue hardship for religious accommodations is “more than a de minimis cost or burden”.  This case could change two elements of that standard.  First, the court may decide that the standard should be higher (more than a “trifling” burden), although several of the justices seemed to recognize that aligning with the “significant” burden standard for ADA accommodations would be unduly burdensome on employers due to the number and variety of “religious” employees.  Second, the court is considering whether undue hardship should consider the burden on other employees, the role of premium/overtime pay to address scheduling conflicts, and the effect of collective bargaining agreements.  While predictions about the specific outcomes are split, most experts believe that the court will make at least some modifications to the standard, especially given the makeup of the current court and its willingness to overturn precedents.  Given the extremely low standard for establishing whether an employee has a sincerely held religious belief, a change to the undue hardship standard could significantly disrupt business operations for many employers.  A decision is expected before the end of the term in June and would immediately require employers to update their religious accommodation policies, forms, and practices to align with the ruling. 

Pay Transparency: Equal pay and transparency continues to be at the forefront of new legislation.  California, New York, Washington, Colorado and some cities/counties have adopted proactive pay transparency laws in the last few years, and other states (such as Illinois and New Jersey) are debating similar laws in their current legislative sessions.  Although unlikely to progress to adoption in the current Congress, a federal pay transparency bill has been introduced that would set a national standard.  The bill entitled the “Salary Transparency Act” would amend the FLSA to require that all employers provide a salary range in all job postings and disclose the pay range upon request to current employees.  The bill contains higher penalties than most states, with civil penalties starting at $5,000 for a first violation, plus potential damages to each affected job applicant and reasonable attorney’s fees.  Given the focus on pay equity and the many conflicting state laws, many large employers are electing to voluntarily evaluate their pay scales and include pay ranges in all job postings, regardless of location.  

 

STATE/LOCAL UPDATES

Colorado:

Annual Payroll Notices.  Effective January 1, 2024, Colorado will require employers to notify employees in writing at least annually that certain tax credits are available; specifically, the Federal and state earned income tax credits, and the federal and state child tax credits.  The notices may be sent electronically, including via email or text message, and must be in English and in any other language the employer uses to communicate with employees.   We expect further information and a draft notice to be issued by the Colorado Department of Revenue in the next few months.

Military Leave.  Colorado amended its military leave law to make it clear that the previously required “15 days” of annual military leave for training is counted based on workdays, and these employees are entitled to the equivalent of three weeks off work based on their regular work schedule. 

Connecticut:  The deadline for small employers (between 5 and 25 employees) to enroll in Connecticut’s state-run retirement plan has been extended to August 31, 2023 (previously March 30).  In 2022, Connecticut launched the MyCTSavings program, requiring employers with 5+ employees in Connecticut to join the state retirement plan if they do not already offer a qualified, employer-sponsored retirement plan for their employees.

Maryland:  Under the recently passed Fair Wage Act of 2023, Maryland’s state minimum wage will get an early increase to $15 beginning January 1, 2024, for all employers.  Previously, large employers would not have been to the $15 rate until 2025, and small employers not until 2026.  Prior versions of the new law included phasing in the increase for small employers and an inflation adjustment going forward, but those provisions were dropped prior during negotiations.

Nevada: 

Wage Claims:  SB 245 has been signed into law and settles a long debate over wage claims.  Employees are now expressly permitted to sue their employer directly for failing to pay wages rather than having to file a complaint with the state. 

Salary History:  Under SB 293, Nevada joins many other states by prohibiting employers from asking about salary history, basing hiring decisions on prior salary, or discriminating against applicants who refuse to provide their salary history.  Employers are still permitted to ask about salary expectations. 

Pay Transparency:  SB 293 also implements some pay transparency requirements, although much less restrictive than some other states.  It requires all employers to proactively disclose the wage or salary range for a position to applicants who have interviewed for the position, and to existing employees who have (i) applied for a transfer or promotion to the position, (ii) completed an interview or received an offer, and (iii) requested it. 

Minimum Wage:  By April 1 of each year, the Nevada Labor Commissioner announces the minimum wage rate that will go into effect July 1.  For 2023, that will be $11.25 for employers who do not offer qualifying health benefits, and $10.25 for those who do.  This will change in 2024 due to a ballot measure in this year’s general election.  Assuming it is validated, beginning July 1, 2024, the state will eliminate the benefits variable, and the minimum wage will be set at $12.00 for all employers.  Annual inflation adjustments will also be eliminated in favor of the legislature enacting increases.   

New York: 

Model Sexual Harassment Policy Updates:  The NYS Department of Labor just finalized significant updates to its model Sexual Harassment Policy and released a new interactive training video and additional online resources (such as a new toolkit, FAQs, and a sample training slide deck).  The state is required to do these every 4 years.  As a reminder, annual anti-harassment training is required for all employees in NYS, and a copy of the policy must be provided upon hire and annually during training.  Employers will want to update their training and handbook policies. Some of the more significant updates include:

• Adding a detailed explanation of gender diversity, including definitions of cisgender, transgender and non-binary persons.

• Adding some legal explanations specific to NYS, such as noting that sexual harassment does not need to be severe or pervasive to be illegal, and that intent not a relevant factor. 

• Updated examples of sexual harassment and retaliation (such as repeated requests for dates and gift giving, asking employees to take on traditionally gendered roles, or having different expectations of employees with children).

• New examples showing how harassment can also happen remotely via virtual meetings, by email, or by phone. 

• Reminders that supervisors should handle harassment with sensitivity to the “victim”.

• Adding a new section on bystander intervention

• Including the required state confidential hotline information.

NYC AI Employment Decision Tools.  The use of AI continues to be scrutinized in the employment context due to potential bias issues.  The NYC Department of Consumer and Worker Protection recently issued final regulations governing New York City’s Local Law 144, now effective July 5, 2023.  Employers who use “automated employment decision tools”, or AEDT’s, should review the regulations and ensure that their applications are supported by appropriate bias audits and notices to applicants and employees.

Virginia: 

Organ Donor Leave:  Effective July 1, 2023, Virginia employes with 50 or more employees are required to provide 60 business days of unpaid organ donor leave per year, and 30 business days of unpaid bone marrow donor leave per year.  Eligible employees are those who have at least 12 months of service and have worked at least 1,250 hours during the year.  Both leaves require continuation of health insurance, and job restoration.  Employers should update their employee handbooks accordingly.

Sexual Harassment/Nondisclosure Agreements:  Like many other states, effective July 1, 2023 Virginia prohibits employers from requiring execution of a nondisclosure/ confidentiality/ non-disparagement agreement related to claims of sexual harassment.  The prior law prohibiting the same agreements when related to claims of sexual assault is also still in effect.  The law does not affect severance agreements, but employers should consult an attorney to ensure that any severance agreement complies with the federal Speak Out Act (as well as an assortment of other federal laws).

 

Asure Software provides this information for general information purposes only.  We are not attorneys, and the information in this update should not be relied upon or regarded as legal advice.  This information may not be accurate or complete as it relates to a particular company or situation and does not reflect all developments or laws in all jurisdictions.