FEDERAL UPDATES
EEO-1 Reporting: The portal finally opens on October 31, with a deadline for reporting on December 5. An updated version of the instruction booklet/FAQs has been posted on the EEOC website. Reporting can only be done through the online portal – don’t forget to certify the data once it is entered or uploaded. A few changes to highlight:
Reporting Periods: This year’s report covers data from nearly a year ago during a snapshot period in October, November, or December of 2022. Employers can choose any pay period in the 4th quarter of 2022 as the snapshot period, but beginning next year (2023 data) employers who meet the threshold at any point during the fourth quarter cannot avoid the EEO-1 reporting requirement by selecting a workforce snapshot period during which the number of employees falls below the threshold.
NAICS Codes: OMB updates NAICS codes every five years (years that end in 2 or 7), so employers may want to confirm that their code includes the 2022 update before filing.
Reports: Employers with a single physical location now only have to submit a Single-Establishment Employer Report. Employers with multiple locations (establishments), must submit a Headquarters Report, Establishment-Level Report(s), and a Consolidated Report. Different “Types” of non-headquarters reports have been eliminated. Starting this year, the portal will auto-generate the Consolidated Report, but employers are still required to review it and correct any errors.
Non-binary Employees: Data must be broken down by job category and by sex and race or ethnicity. Questions come up every year regarding how to report non-binary employees. Currently, the data classifications provide only binary options (i.e., male or female). However, employers can voluntarily choose to report data for non-binary employees in the “comments” section under the heading “Additional Non-Binary Employee Data”. The EEOC provides this example:
Additional Non-Binary Employee Data: 1 non-binary employee in Job Category Administrative Support Workers; Race/Ethnicity: White (Not Hispanic or Latino). 3 non-binary employees in Job Category Professionals; Race/Ethnicity: Employee 1 – Black or African American (Not Hispanic or Latino) / Employee 2 – Hispanic or Latino / Employee 3 – Two or More Races (Not Hispanic or Latino).
Employers who choose this option should not assign these employees to the male or female categories or any other categories. Single-establishment employers can add this information in the “Certification Comments” section; Multi-establishment employers can add this information in the “Headquarters or Establishment-Level Comments” section. Note that if the sex reported through voluntary self-identification differs from the employment records, employers should follow the self-identification form.
Client Sites: This year employers are still permitted to report employees at client sites at either the client site or at a company establishment. Next year employees working at client site locations must be reported at the client site locations.
STATE/LOCAL UPDATES
California: The deadline for new laws has passed for 2023, and many are surprised by the high number of bills vetoed by the Governor. In an unusual stance for California, his rationales often cited the unnecessary or excessive burden on employers. Included in the list of rejected bills, some of which may show up again in next year’s session:
- VETOED: Unemployment benefits for striking workers
- VETOED: Adding “caste” to FEHA-protected categories (based on his opinion that it is already included as a protected class under ancestry, so discrimination is still prohibited)
- VETOED: Requiring 30 days written notice before calling remote employees back to the office
- VETOED: Adding “family caregiver” to protected categories
- VETOED: Expanding the WARN Act to require 75 days’ notice rather than 60, significantly expanding its application to more employers, and prohibiting employers from requiring a release of claims in severance agreements.
- VETOED: Providing PFL benefits to individuals standing “in loco parentis” to minors, and removing the restriction that only one family member at a time is allowed to access PFL benefits.
However, there are still plenty of new California laws on the horizon:
Violence Prevention Plans: California passed the first state requirement for employers to have a written workplace violence prevention plan in place by July 1, 2024. Although most healthcare employers are already required to have a plan, now most employers will be required to do the same. There are some very narrow exceptions for employers already in compliance with another workplace violence prevention program law or regulation, law enforcement, and workplaces with fewer than 10 employees that are not open to the public and have a compliant IIPP plan in place. The violence prevention plan can be included in the IIPP, or be developed as a separate document. Cal/OSHA is working on standards and is required to complete them before the end of 2026.
The law also requires employers to keep a violent incident/serious threat log containing information about each workplace violence incident, provide effective employee training when the plan is first established and annually thereafter, and maintain certain records for designated periods (generally 5 years).
Hazard assessment records, training records, and violent incident logs must be made available to employees and their representatives, upon request and without cost, for examination and copying within 15 calendar days of a request.
In addition to the workplace violence prevention plan requirement, beginning January 1, 2025, employers will be permitted to seek a restraining order on their own behalf if an employee has suffered unlawful violence or a credible threat of violence that could reasonably result in workplace violence.
Workplace Restraining Orders: Harassment (eff 1/1/25) In addition to the restraining orders available under Workplace Violence, SB 428 allows employers to seek restraining orders on behalf of employees who have been harassed or suffered unlawful violence or a credible threat of violence in the workplace or that could reasonably construe to be carried out in the workplace, or where there is “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose.” The new law prohibits a court from issuing such an order if it would prohibit speech or activities protected by the NLRA.
Paid Sick Leave: Beginning January 1, 2024, California’s 3-day/24-hour paid sick leave requirement will increase to 5 days/40 hours. The standard accrual rate of 1 hour per 30 hours worked remains the same, but employers who use an alternative method of accrual must allow employees to earn at least 24 hours by their 120th day of employment (or other 12-month period used), and 40 hours by their 200th day of employment (or other 12 month period used). The use cap is also increasing to 40 hours/5 days per year, and carryover is increasing to 80 hours/10 days.
The legislature also attempted to make it easier to coordinate local paid sick laws in California by requiring local ordinances to follow state law for certain provisions:
- End of employment payout of employees’ unused sick leave
- Employer advancement of (unaccrued) sick days to employees
- Employer written notice requirement regarding available leave
- Rate of pay calculations for employees’ actual sick leave taken
- Employee notification for foreseeable and unforeseeable use of sick leave
- Timing of payment to employees for paid sick leave used
Localities are still permitted to require more generous policies in other areas, such as increasing the number of hours required or adding acceptable reasons for using sick leave.
Employers may need to update their sick leave/PTO handbook policies, update payroll, and notify employees before the beginning of the year. An updated sick leave poster is pending.
Non-Compete Agreements (eff 1/1/24): California has a long history of hostility towards non-compete agreements. Its Business and Professions Code currently states that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” California courts have interpreted this section as prohibiting post-employment noncompetition, non-solicitation of customers, and non-solicitation of employee agreements, with few exceptions.
SB 699 expands this prohibition, stating that any contract that is void under this code section is unenforceable regardless of where and when the contract was signed. This means that an employer or former employer cannot attempt to enforce it even if the contract was signed outside of California and the employment was continuously maintained outside of California. For example, if an applicant’s former employer in AZ requires a non-compete agreement and seeks to block them from being hired in CA, their agreement may not be enforceable in CA. This creates some legal issues, and we expect there to be some additional clarification through litigation.
In addition, rather than just voiding the agreement SB 699 prohibits employers from entering into them at all at the risk of committing a civil violation. And just to make it crystal clear, AB 1076 also adds a new subsection to the Business and Professions Code that makes it unlawful to impose noncompete agreements on employees, rather than just voiding them. Between the two laws, the risk of penalties and lawsuits for requesting or entering into this type of agreement just increased exponentially.
Finally, AB 1076 requires employers to send notices via mail and email to current employees and former employees (employed after January 1, 2022) who signed this type of agreement, notifying them that their agreement is void. These notices must be provided by February 14, 2024. A failure to send these notices is a violation of the California Unfair Competition Law.
Cannabis: SB 700 expands existing law (AB2188 passed last year but is effective 1/1/24) that makes it unlawful for an employer to discriminate against an applicant or employee based on off-duty cannabis use or a positive drug test that doesn’t differentiate between psychoactive and nonpsychoactive metabolites (which is not yet available), except in the building and construction trades. This bill also makes it unlawful to request information from an applicant relating to their prior use of cannabis, including information obtained through a criminal background check, unless specifically permitted under state or federal law.
Retaliation: (eff 1/1/24) SB 497 makes it easier for employees to show retaliation by creating a rebuttable presumption of retaliation if an employee is subjected to an adverse employment action within 90 days of an employee’s complaint of a labor violation, a health or safety issue, or unequal pay. The new law also increases the civil penalty from $10,000 generally to $10,000 per employee per violation. Employers may want to pay additional attention to thoroughly documenting performance issues to enable them to rebut the presumption.
Reproductive Loss Leave (SB848 eff 1/1/24): Similar to bereavement leave, California employers subject to FEHA (5+) will be required to provide additional unpaid leave to individuals employed for at least 30 days for a “reproductive loss event”, defined as a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The right to this leave applies to persons who would have been a parent of the child had the event not occurred. The leave must be used within three months of the “reproductive loss event”, and days of use do not need to be consecutive. For multiple losses within 12 months, the leave is capped at a total of 20 days. The leave is unpaid, but employees may use available accrued leave. As always, retaliation or interference is prohibited, and confidentiality is required. The new law does not contain a documentation or certification requirement.
Health Care Employee Pay (eff. 6/1/24): SB525 addresses ongoing attempts to raise the minimum wage for certain California health care workers. The new law creates a patchwork of minimum wage requirements that vary by type of healthcare employer. The bill affects “Covered Health Care Facilities,” which include facilities that are part of an integrated health care delivery system, acute care hospitals, certain licensed skilled nursing facilities, licensed home health agencies, licensed residential care facilities for the elderly (if affiliated with acute care provider or owned, operated or controlled by an acute care hospital, acute psychiatric hospital or parent entity of such hospitals), mental health rehabilitation centers, and more – health care employers will want to carefully consider the definition to determine whether it applies to them. The definition can be found in Section 1(b)(3) here: Bill Text – SB-525 Minimum wages: health care workers. The minimum wage requirements generally fall under several categories:
- Large health systems with more than 10,000 workers and dialysis clinics would pay $23 an hour in 2024, $24 in 2025, and $25 in 2026.
- Hospitals with a “high governmental payor mix” (Medi-Cal and Medicare patients) and rural independent hospitals would pay $18 in 2024 (which would gradually increase to $25 by 2033).
- Community clinics would pay $21 in 2024, $22 in 2026, and $25 in 2027.
- Other covered healthcare employers would pay $21 in 2024, $23 in 2026, and $25 in 2028.
The bill extends beyond just those employees providing patient care. It also includes support staff such as janitors, housekeeping, groundskeepers, guards, administration, food service, etc.
Fast Food Franchises: After extensive negotiation, a planned referendum, and a lawsuit, AB 1228 enacts a $20 minimum wage for large fast food chains, and establishes a Fast Food Council to propose health, safety, and employment standards. For the moment, it only applies to a “fast food restaurant”, which is defined for this purpose as a limited-service restaurant that is part of a “national fast food chain”. A “national fast food chain” is defined as a set of fast food restaurants consisting of more than 60 establishments nationally that share a common brand.
Food Handlers: Under current California law, any individual who is involved in the preparation, storage, or service of food in a “food facility” must obtain a CA Food Handler card within 30 days of being hired. It is valid for 3 years before it must be renewed. SB 476 shifts the burden for all costs associated with obtaining required food handler cards to employers beginning January 1, 2024.
Under the revised law, employers are required to pay for any costs associated with obtaining the card, including fees for the course and testing, as well as payment of wages at the employee’s regular hourly rate for the time required to complete the training and exam (estimated to take approximately 2 ½ hours). While employees are completing the training course and examination, they must also be relieved from all other work duties.
The California Department of Public Health is required to compile and post a list of ANSI-certified food handler training programs, including the cost of each program (with at least one of them costing no more than $15), by January 1, 2025 and local health departments are required to provide a link to that information on their websites.
In addition, employers are not permitted to require applicants to have an existing food handler card as a condition of employment. Instead, they will be required to allow new employees (and existing employees coming up for renewal) to use paid time during regular working hours to complete the course and take the exam. They also have to pay for the course and any fees associated with it.
Employers should update their handbooks and policies, and notify managers that they should schedule paid time during regular working hours for new employees without a card to take the course and exam within 30 days of their first day of employment and do the same for existing employees when their card is expiring. In addition, employers should review their job postings and remove any reference to having a food handler’s card as a required qualification; It is not clear whether it can be a preferred qualification.
Colorado:
Tipped Employees – The Colorado Division of Labor Standards and Statistics recently issued proposed amendments to COMPS Order #39, with a public hearing scheduled for October 30. Proposed changes include changes to the definition of a “tipped employee” and new rules about which employees can participate in a tip pool. Currently, a tipped employee in Colorado is the same as under federal law (customarily and regularly receives more than $30 per month in tips). The Division’s proposal would instead define a tipped employee as “any employee who regularly receives more than $1.55 per hour in tips” over a workweek, and would restrict the tip pool to those who “perform significant customer-service functions in contact with patrons”.
Connecticut: Paid Sick and Safe Leave for 50+ employees who are “service workers” has been expanded (eff 10/1/23) to add two new permitted uses: a mental health wellness day, and as a parent/guardian of a child who is a victim of family violence or sexual assault.
Illinois (Chicago):
Tip Credits: Like several states, the Chicago City Council passed the “One Fair Wage” bill which phases out the tip credit over 5 years by reducing it each July 1 until fully eliminated by July 1, 2028. The current subminimum wage for tipped employees is $9.48 per hour, a 40% credit against the standard minimum wage of $15.80 per hour, which applies to employers with at least 21 employees. For employers with more than three but fewer than 21 employees, the subminimum wage for tipped employees is $9.00 per hour, a 40% credit against the standard minimum wage of $15.00 per hour applicable to such employers.
The new ordinance reduces the tip credit in stages, so that the tip credit to employers may not exceed:
- 40% of the applicable minimum wage rate until July 1, 2024
- 32% of the applicable minimum wage rate on and after July 1, 2024
- 24% of the applicable minimum wage rate on and after July 1, 2025
- 16% of the applicable minimum wage rate on and after July 1, 2026
- 8% of the applicable minimum wage rate on and after July 1, 2027, until and including June 30, 2028.
As of July 1, 2028, the standard minimum wage rate in effect at that time would apply to all employees, including those in occupations that customarily receive tips. Servers and other employees in customarily tipped occupations, however, would still be entitled to earn and retain their tips.
Massachusetts:
Paid Family and Medical Leave. Effective 11/1/23, MA employers are required to give employees the option to use available accrued leave to top off PFML benefits (up to 100% of their regular wages). Currently, employees may only use accrued leave during the 7-day waiting period or for a block of time at the beginning or end of the leave. The Department of Paid Family and Medical Leave is expected to provide additional guidance to assist with calculations.
DPFML also released new contribution rates effective 1/1/24. For 25+ employers the total contribution rate will increase from 0.68 percent to 0.88 percent of employee wages, divided between the employee and employer. Up to 100 percent of the family leave contribution and 40% of the medical leave contribution can be withheld from the employee’s wages (0.18% and 0.28% of wages respectively). Employers are responsible for contributing the remaining 60 percent of the medical leave contribution (0.42% of wages).
Also effective 1/1/24 the maximum weekly benefit increases from $1,129.82 to $1,149.90.
Washington:
Pay Transparency: Washington employers with 15+ employees, as well as other employers who are posting ads for jobs that could be performed in Washington, should be aware that plaintiff’s attorneys in the state are vigorously pursuing class action lawsuits for violations of pay transparency requirements on behalf of applicants. They are seeking the greater of $5,000 per applicant/employee or actual damages, and attorneys fees, which can add up very quickly depending on how many applicants you have for each position. All employers are advised to review their job postings (and those of their outside recruiters) and at a minimum ensure that they include compliant salary ranges, a general description of benefits (medical, dental, vision, vacation, extra sick leave, retirement, and any other benefits reportable for tax purposes), and any other compensation (commissions, discretionary bonuses, profit sharing, travel allowance, relocation assistance, housing allowance, stock options, etc.) The statute of limitations is 3 years, so noncompliance now may result in liability down the line if more plaintiff’s lawyers join in.
PFML Rates: The ESD Commissioner is supposed to release new PFML rates for 2024 on or around October 20, but hasn’t done so yet. This will be the first year that the legislature’s new formula for calculating the premium rate will be in effect. Last year’s rate was 0.8%, but the recalculation, reallocation between family leave and medical leave, and the removal of the solvency surcharge option may shake things up. Regardless, the new rate cap is in effect so total rates will not exceed 1.2%.
If you want to speak to an 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.