FEDERAL UPDATES

Exempt Salary Increases Blocked – A federal judge in Texas just invalidated the DOL’s rule increasing the exempt salary thresholds.  This means that the mandatory increase that went into effect in July, the additional increase scheduled for January 1, and the automatic increases every three years are currently blocked nationwide.  The minimum federal exempt salary level for executive, administrative, and professional employees defaults immediately to the prior rate of $684/week ($35,568/year), the rate set during Donald Trump’s initial term.  The current administration may appeal the ruling, but it would be filed in the Trump-friendly 5^th Circuit. Hence, it is unlikely (but not impossible) that the appeals court would reinstate the rule or that a judge in another jurisdiction could come to an opposite conclusion that would elevate it to the US Supreme Court.  For employers that rely on the highly compensated employee exemption in states that allow it, that increase has also been vacated and is, at least for the moment, returning to $107,432.  The federal court ruling in Texas does not affect any state thresholds – they are still in effect and subject to scheduled increases, especially in states such as California, New York, Colorado, and Washington.

Federal Contractors – EO 14026 Minimum Wage:  Contractors subject to this order are scheduled for a minimum wage increase from $17.20 to $17.75 on January 1, 2025.  Litigation is ongoing, and a recent decision by the 9^th Circuit just vacated a lower court’s denial of an injunction.  Other cases are pending, and President-elect Donald Trump may ultimately rescind the order, but not before the January 1 effective date.  Due to the legal complexity and various jurisdictions involved, federal contractors subject to this order may want to consult with their legal counsel to determine whether they need to comply with the schedule increase.

NLRB – Captive Audience Meetings.  In another blow to employers, the National Labor Relations Board just overturned 75 years of precedent when it held that it violates the NLRA to compel employees to attend a meeting where the employer expresses either positive or negative views on unionization (captive audience meetings).  An appeal is possible, and most experts believe that once the Trump administration positions the Board with a Republican majority this issue will be revisited by a much more employer-friendly board.

DOL Opinion Letter:  Expense Reimbursements/Regular Rate.  Although not surprising, the DOL just released an opinion letter confirming that while expense reimbursements are generally excluded when calculating the regular rate of pay, the excluded amounts must actually or reasonably approximate the amount of the actual expense.  The letter did not offer any guidelines for determining how to calculate the amount but noted that it would watch for attempts to artificially inflate reimbursement amounts to decrease the regular rate of pay and therefore reduce overtime payments.

STATE/LOCAL UPDATES

Alaska – Voters in Alaska approved a ballot measure that will require:

Minimum Wage/Exempt Salaries: The minimum wage will increase to $13/hour in 2025, $14/hour in 2026, $15/hour in 2027, and then will increase based on inflation.  These increases will also affect the exempt salary level, which is set at two times the state minimum wage.

Paid Sick Leave:  Beginning July 1, 2025, employers with fifteen or more employees will be required to allow employees to use up to fifty-six (56) hours of paid sick time per year, and employers with fewer than fifteen employees to allow employees to use up to forty (40) hours of paid sick time per year. Employees will accrue one hour of paid sick time for every thirty (30) hours worked.

Captive Audience Meetings:  Effective July 2, 2025, employers will be prohibited from retaliating against employees who refuse to participate in employer-sponsored meetings or listen to communications if the primary purpose is to communicate the employer’s opinion about religious or political matters.

Connecticut – Paid Sick Leave.  Although CT paid sick leave is currently only applicable to employers with 50+ “service workers”, Public Act No. 24-08 has been amended to phase in sick leave for other employers and employees in the state.  Beginning 1/1/25 it will apply to 25+ employers; on 1/1/26 will apply to 11+ employers; and on 1/1/27 to all employers.  Headcount for this purpose will be as of January 1 each year.  While there were some exclusions for certain manufacturers, nonprofits, and non-service workers, those have been eliminated. The only remaining exclusion will be for certain construction-related employers with collective bargaining agreements, and seasonal employers who work fewer than 120 days per year.  For others, sick leave will accrue at the rate of 1 hour per 30 worked, up to 40 hours per year.  Employers will not be permitted to require documentation, or that an employee find a replacement.  Posters in English and Spanish are required, as well as written notice to each employee on 1/1/25 or the date of hire thereafter.

Illinois – E-Verify.  The E-Verify requirements under the Illinois Right to Privacy in the Workplace Act will be effective January 1.  The statute contains very detailed requirements, some of which are more restrictive than federal requirements, such as:

• Upon initial enrollment in E-Verify or within 30 days after January 1, employers must file an attestation with IDOL that they have received the DHS training materials, all employees using the program have completed the training, they have posted the required notices, and will retain all certifications of completion of training for possible inspection.
• Employers must post the Right to Privacy in the Workplace/E-Verify poster (and the federal poster) in English and Spanish.
• If the employer determines that there is an issue with the verification information, it must provide the specific documents at issue, the reason why they are deficient, and instructions on how to correct the problem.  If the employee asks, it must provide the original deficient documents within 7 business days.
• If the employer receives a notice of deficiency from a federal or state agency (including a TNC), written notice must be provided to the employee within five business days per the following guidelines:

• • Notice should be given via hand-delivery if possible, or if not possible then by mail and email.
  • The notice must include an explanation that the agency has notified the employer that the documents presented do not appear to be valid or reasonably related to the employee and the time period the employee has to contest that determination.
  • If requested by the employee, the employer must provide the original notice from the federal or state agency within seven business days.

• If a notice of an upcoming inspection is received from any agency, the employer:

• • Must post a notice to all employees in all relevant languages within 72 hours of receipt of the notice of inspection.
  • Include details regarding the conducting agency, the date the notice was received, the nature of the inspection, and a copy of the notice. (IDOL is expected to prepare a template for this notification.)

• If during an inspection there is an issue with a specific employee’s documentation, the employer:

• • Must provide written notice to the employee within 5 business days.
  • Provide the notice in person if possible, or if not possible by mail and email.
  • Must include a full explanation of what was found, the period for the employee to notify the employer if they plan to contest the finding, the time and date of any upcoming meetings on the topic, and the employee’s right to representation.
  • Must notify the employee within 72 hours after receipt of a final determination, and if requested provide the original notice from the inspecting entity within 7 business days.

Employers who use E-Verify in Illinois may want to review the statute, designate certain employees as authorized and certified to access the system, download the required posters from the IDOL website, and be prepared to quickly respond to discrepancies, TNCs, and audits.

Massachusetts – PFML Notices.  The Department of Family and Medical Leave just published updated rate sheets, an updated poster, and updated notices for the MA PFML program.  The notice of 2025 contribution rates must be completed by employers and received by employees by December 2, 2024.  Rate notices should be delivered in the same manner used to inform employees of other policies and updates. Unlike the new hire notices, employers are not required to obtain a signed acknowledgment but should be able to prove that the Rate Sheets were distributed.  The DFML has indicated that it will continue to conduct PFML audits, including notice requirements.  The penalty for failing to provide a required notice first violation is $50 per employee, and for subsequent violations, $300 per employee.

Missouri – Although it won’t be certified until December, and legal challenges are anticipated, voters appear to have passed a ballot measure that will require:

Minimum Wage: The minimum wage will increase to $13.75/hour at the beginning of 2025 and $15.00/hour by 2026. Beginning in 2027, the minimum wage will be adjusted based on inflation.

Paid Sick Leave: Employers with fifteen or more employees will be required to allow employees to use up to fifty-six (56) hours of paid sick time per year, and employers with fewer than fifteen employees to allow employees to use up to forty (40) hours of paid sick time per year. Employees will accrue one hour of paid sick time for every thirty (30) hours worked, beginning on May 1, 2025.

Nebraska – Paid Sick Leave.  Nebraska voters overwhelmingly approved the Nebraska Healthy Families and Workplaces Act, which will require private employers to provide paid sick time to all employees (regardless of the size) effective Oct. 1, 2025.  Employees will be entitled to 1 hour of paid sick leave for every 30 hours worked.  Small employers (1-19) can cap it at 40 hours annually; other employers can cap it at 56.

Sick time may be used for the employee’s or their family member’s mental or physical illness, injury, or health condition (including diagnosis, treatment, and preventive care); to attend a meeting necessitated by the child’s mental or physical illness, injury, or health condition, at a school or place where the child is receiving care; or some public health emergencies or exposure to a communicable disease.

The Act is a little stricter than some other states about notices, documentation, and medical disclosures:

• Employees can orally request to use paid sick time.
• Notice procedures must be in writing and provided to employees.
• Employers cannot require employees to find their coverage.
• Documentation can only be requested after three consecutive workdays and can be an attestation from the employee.
• Employers cannot require employees to disclose details of the employee’s or their family member’s health information.

The Nebraska Department of Labor will publish a model notice, which must be provided to employees and posted by Sept. 15, 2025.  After that, the notice must be provided to new employees when they start employment.

Accrued but unused sick leave is not required to be paid out at termination of employment, but vacation/PTO is.  For this reason, employers will have to decide whether to include sick leave in those baskets or convert some or all of it to sick leave.

Additional guidance from the state is expected before the effective date.

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.