FEDERAL UPDATES

Federal Contractors:

AAP Certification Reminder – Certification in the OFCCP portal is due by July 1, 2024.

AI Guidance – As required by President Biden’s Executive Order 14110, OFCCP released new guidance for the use of artificial intelligence by federal contractors in employment.  Obligations include assuring disability accommodation, preventing discrimination, record retention, conducting routine assessments of AI systems for potential bias and discrimination, and exploring potential alternative procedures.  Use of “promising practices” is also strongly encouraged, such as providing notices disclosing the use of AI to applicants and employees, creating AI governance systems, and contractually requiring vendors to maintain appropriate records and make them available in the event of a compliance evaluation.  Many other federal agencies and states are also contemplating or enacting detailed AI regulations in the employment context, so federal contractors may want to review their use of AI and how other current and future regulations may impact their processes.

Artificial Intelligence: The White House just provided employers with a fact sheet outlining best practices when using AI for workplace purposes, with a focus on anti-discrimination, transparency, employee involvement, and avoiding job displacement.

• Employee “empowerment” – allows employee input into design, development, testing, training, use, and oversight, especially from underserved communities.
• Ethical development – designing, developing, and training in a way that protects workers.
• AI Governance – clear governance systems, procedures, human oversight, and evaluation processes.
• Transparency with workers and applicants.
• Compliance with EEO, NLRA, health and safety, and other employment laws.
• Enable workers by using AI to assist workers and improve job quality.
• Support employees with upskilling to avoid complete displacement by AI.
• Data Management – limited collection, confidentiality, and legitimate business use only.

STATE/LOCAL UPDATES

California:

Restaurant Service Fees –  Eff. July 1, 2024, California businesses will be prohibited from advertising, displaying, or offering “a price for a good or service that does not include all mandatory fees or other charges” other than taxes and shipping.  The Attorney General just released FAQs, confirming that the law applies to event tickets, short-term rentals, hotels, restaurants, food delivery, and generally to most sales or leases of goods and services for a consumer’s personal use. As a result, California restaurants will be prohibited from charging service fees or other surcharges (such as a surcharge for employee health care) unless the amount of the service fee is specifically identified as part of the listed price.  Merely stating that a certain percentage will be added to the bill will not be sufficient.

Wage Statements (Penalties) – In a rare win for employers in California, the CA Supreme Court ruled that if employers have a reasonable, good-faith belief that they have provided employees with accurate wage statements they will not be liable for penalties for inaccuracies.  The case was originally filed as a class action in 2007, and related to missed meal and rest breaks.  The employer believed it was exempt from meal and rest break requirements as a federal contractor, which was inaccurate.  Although the employer was still liable for the missed meal/rest breaks and penalties, the court held that it was not liable for additional statutory penalties (up to $4,000 per employee) for providing inaccurate itemized wage statements.

Colorado – Artificial Intelligence.  Colorado is on the verge of finalizing a “landmark” Artificial Intelligence law that would create statutory liability and a duty of care related to algorithms that result in discrimination in the employment context.  It would also require most employers using “high-risk” AI tools to take serious and burdensome compliance steps by February 1, 2026, such as implementing an AI risk management policy and program, conducting impact assessments, and providing detailed notices.  The law is highly detailed, vague in certain areas, and will certainly require significant legal assistance for compliance.  Most employers are expected to forego the use of AI tools for employment purposes in Colorado entirely, especially given the rights to opt out and appeal processes that could require more HR management than the benefits could provide.

Connecticut – Paid Sick Leave.  Since 2012 Connecticut has required 50+ employers to provide paid sick leave to “service workers”.  It is now phasing in an expansion of this requirement that will eventually apply to all employers, and all employees (other than seasonal workers who work 120 days or fewer during a year).  Starting 1/1/25 it will apply to 25+ employees, the next year to 11+ employees, and by 1/1/27 to all employers.  There will no longer be an exclusion for certain manufacturers or nonprofits.  Like many other states, paid sick leave will be 1 hour/30 worked, up to a maximum of 40 hours per year, and will cover illness, medical care, closure of a school or place of business, and domestic violence.  Employers will not be permitted to ask for documentation, and cannot require employees to find their coverage.  There will be a new poster and a required notice to be provided to employees at hire or by 1/1/25.

Oregon – OFLA/PLO. Oregon is preparing for the July 1 transition that will significantly change its leave laws by separating Paid Leave Oregon and OFLA.  Employers have been concerned about leaves that straddle July 1, so BOLI just issued a temporary administrative order addressing the transition.  As a reminder, beginning July 1, 2024, OFLA will only cover pregnancy disability leave; sick child leave (non-serious or serious health conditions); bereavement leave; and, between July 1, 2024, and December 31, 2024, two weeks of leave to effectuate the legal process required for placement of a foster child or the adoption of a child. It will no longer cover parental leave or leave for a serious health condition of the employee or the employee’s family member (except for the employee’s sick child).

According to the administrative order, employers must notify any affected employees in writing no later than June 1, 2024, that their leave will no longer qualify for OFLA as of July 1.  They are not required to allow employees to complete leaves that were approved under OFLA if they are they are no longer eligible on July 1 but must provide them with Paid Leave Oregon information if they are eligible to apply to that program and have not already done so.

Employers should individually evaluate any OFLA leaves that will extend beyond July 1 to ensure a smooth transition and compliance with the notice requirement.  While doing so, they may also want to review their leave year definitions to comply with the requirement that it be measured forward, and possibly align it with their FMLA leave year in Oregon to avoid stacking leaves.

Maryland – Family and Medical Leave Delay.  Start dates for contributions and benefits for the pending Family and Medical Leave Insurance Program have been delayed again.  Contributions will now begin on July 1, 2025, and benefits will begin on July 1, 2026.  Contribution rates are expected to be set by February 1, 2025.

New York – Exempt Salaries.  As the federal exempt salary basis moves toward a significant increase, New York employers may want to review positions designated exempt under the professional category.  While New York’s salary basis for executive and administrative employees is at or near the new federal thresholds, the state does not have a salary basis for professional employees. As a result, professional exempt employees may be affected by the new federal threshold, especially if they work part-time.

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.