FEDERAL UPDATES

FTC Noncompete Ban (eff 9/4/24). The new FTC rule prohibits most employers from entering into a non-compete clause with a worker (including independent contractors) and applies retroactively.  There is a very limited exemption for non-competes in effect before 9/4/24 with senior executives who both earn more than $151,164 per year and are in a “policy-making position” with final authority to make policy decisions regarding significant aspects of the business – a very high standard.

While several lawsuits have been filed, and a ruling on at least one of them is expected by August 30, to date no ruling has been issued to prevent this ban from going into effect.  If a nationwide ruling is not issued before the effective date, employers must provide clear and conspicuous written notice to affected current and former employees that their noncompete is no longer valid.  The notice must be in writing, and delivered by hand, email, or text message.

Employers should review their files to identify affected current and former employees, collect contact information, and draft a notice by FTC requirements.  The notice must be delivered by 9/4/24, but the recommendation is to hold delivery until 9/3/24 in case there is a court ruling by then.  Employers should also be reviewing their current handbook and other forms to identify amendments needed by 9/4 and should refrain from asking employees to sign a noncompete agreement after September 4 barring a court decision by that time.

Form I-9:  USCIS extended the expiration date of I-9 forms to May 31, 2027 (updated from July 31, 2026).  Either form is currently valid, but USCIS is encouraging employers to download and use the form that shows “Expires 5/31/2027” in the upper right-hand corner well before the other form technically expires in 2026.  No other changes were made.

9^th Circuit (CA, ID, MT, NV, OR, WA):  Off-duty Social Media Harassment.  A Nevada district court dismissed a sexual harassment claim because the offending Instagram posts happened outside the workplace.  The 9^th Circuit reversed that decision, finding that conduct outside the workplace could be severe and pervasive enough to create a hostile work environment that requires an employer to take corrective action.  This was a particularly egregious case where a Lompoc prison psychologist discovered that a co-worker had an Instagram page containing overtly sexist, racist, anti-Semitic, homophobic, and transphobic memes, as well as derogatory, graphic, and sexually violent posts, some of which personally targeted her.  It was followed by more than 100 prison employees, including the HR Manager and upper-level management.  Despite several complaints, she was told she needed to have a sense of humor and toughen up and was repeatedly dismissed.  The court acknowledged that even if social media activities take place off-duty and outside the workplace, they can easily be used to harass and bully people in the workplace and employers must take action that puts a stop to it.

STATE/LOCAL UPDATES

California:  Unincorporated LA County – Fair Chance Ordinance.  Eff. 9/3/24, employers with locations or employees in the unincorporated areas of LA County will be required to comply with onerous new restrictions and notices related to criminal background checks that are much more stringent than state requirements.  For example:

• All employers will be required to state in job postings that candidates with arrest or convictions records will be considered for employment “by the Los Angeles County Fair Chance Ordinance for Employers and the California Fair Chance Act”.
• Employers must include a list of all material job duties of the specific job for which they believe that criminal history may have a direct, adverse, and negative relationship, potentially resulting in the withdrawal of the conditional offer of employment.
• Employers must include in a conditional offer letter a statement that the offer is contingent on the review of criminal history, and show good cause for conducting a review of criminal history for the specific job position, with supporting justification provided in writing. The Ordinance clearly states that a general statement that the employer is reviewing criminal history due to “safety concerns” without more supporting justification does not suffice.
• The offer letter must include information about the type of information that will be reviewed by the employer (i.e. education, social media history, drug testing, etc.)
• In addition to the state Labor Code requirements, the ordinance makes it unlawful for most employers to inquire about or consider:
  • convictions older than seven years measured from the date of disposition (subject to certain exceptions)
  • driving infractions unless driving is more than a de minimis part of the job;
  • convictions that arise out of conduct that has been decriminalized since the conviction; and
  • diversions and deferrals, regardless of whether they have been completed and dismissed.

• Employers must provide candidates with their written individualized assessments by mail and email, with the deadline to respond in bold, all caps, or underlined.
• Instead of five additional business days, candidates have fifteen additional business days to obtain evidence of inaccuracy or rehabilitation.
• A notice of rights must also be posted on any website frequently visited by applicants and employees. A model notice is forthcoming.

Employers who conduct background checks in Unincorporated LA County may want to review their procedures and carefully review the new ordinance to ensure compliance.

Hawaii: Captive Audience Meetings (eff. 7/2/24).  Hawaii recently joined several other states by prohibiting employers from taking any adverse action against employees for refusing to attend or participate in an employer-sponsored meeting that communicates the employer’s opinion about political matters, or declining to receive or listen to any communication regarding the employer’s opinion on political matters.  “Political matters” are “anything related to an attempt to influence a future vote by persons in an audience”.

Illinois:  Captive Audience Meetings (unions)  Effective 1/1/25, Illinois has banned mandatory attendance at company meetings used to try to persuade workers that they would be better off without a union.  The NLRB also considers these types of meetings to be unlawful.

Michigan:  After years of ballot measures, legislative action, and lawsuits, the Michigan Supreme Court determined that original ballot initiatives raising the state’s minimum wage and expanding paid sick leave will take effect on February 21, 2025, and the amendments adopted by the legislature are invalid.  This means that the minimum wage is currently scheduled to increase from $10.33/hour to an inflation-adjusted amount, expected to be between $12.00/hour and $12.50/hour, effective 2/21/25.  The State Treasurer will then adjust it annually based on a schedule of phased-in increases plus inflation.  In addition, most Michigan employers will be required to offer 72 hours of sick leave annually, which will be paid for 10+ employees, and the first 40 hours of which will be paid for smaller employers. Tip credits will also be affected.  However, the legislature still has time to act, and may very well pass additional legislation before February that changes these requirements.

Minnesota:  Significant changes to employment law in Minnesota have been coming quickly in recent years, and this one is no different.  The Governor recently signed a legislative package that includes new pay transparency requirements (eff 1/1/25; 30+ employees), minor changes to earned sick and safe time and the new paid family leave law (benefits scheduled to begin 1/1/26), and classification of independent contractors, as well as new laws expanding leave rights for pregnant employees (eff. 8/1/24), permitting oral fluid drug testing, prohibiting certain nonsolicitation agreements, expanding rights and remedies under the Minnesota Human Rights Act, expanding the Minnesota Department of Labor and Industry’s enforcement rights, and making minor adjustments to the minimum wage and tip laws. Minnesota employers should be reviewing their pay scales and preparing to update their job postings, auditing their independent contractor classifications, and updating handbooks and policies to reflect these changes.

New Hampshire – Crown Act.  New Hampshire is the 26^th state to adopt a Crown Act, which states that: No person shall be subjected to discrimination in employment because he or she wears a protective hairstyle. In this section, “protective hairstyles” means hairstyles or hair types, including braids, locs, tight coils or curls, corn rows, Bantu knots, Afros, twists, and head wraps. Employers may want to update their EEO policies to reflect this new protected class.

If you’d like to speak to an Asure HR expert about your business, connect with us.

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.