FEDERAL UPDATES
Tip credits: A Texas federal appeals court just blocked the DOL’s 2021 80/20 (aka 80/20/30 or 80/20 plus 30) regulation related to tip credits. The rule disallowed tip credits for (i) time spent performing directly supporting work (i.e. rolling silverware, cleaning, setting tables, prep work) that exceeds 20% of the total hours worked by that employee at the tipped rate, and (ii) time that a tipped employee performs directly supporting work for a continuous period that exceeds 30 minutes. Work that is not “directly supporting” is still covered under the 1967 dual jobs rule, such that work unrelated to tipped work must always be paid without a tip credit.
The appeals court cited the US Supreme Court’s new Loper Bright standards for review of agency action. It vacated the rule nationwide citing the “unambiguous” wording of the statute that allows tip credits for any employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips. There is still uncertainty about where this could go next, with some suggesting that an appeal, conflicting opinion from another federal court outside the 5th Circuit, Supreme Court intervention, or new administration could change the rules yet again. For now, most experts expect to revert to the guidance under the Trump administration, which did not include an 80/20 rule. Employers should still ensure that any work performed by a tipped employee is directly related to their tipped work. They can consult the DOL’s O*Net database for a list of the duties related to a tipped employee’s occupation.
The decision does not affect state law, so employers should continue to follow their state’s guidance on tip credits and minimum wage, and watch for new state requirements now that the federal rule has been vacated.
Voting Leave: Voter turnout is expected to be especially high this November, so employers may want to prepare for requests for time off to vote. These requests are governed by state law, which can vary from no requirements at all to a few hours of paid leave. Many are based on whether an employee has sufficient time to vote outside of work, and even in states without specific laws employers may still be restricted from interfering with employees exercising their right to vote. Employers may want to review their state’s requirements to determine their obligations, such as whether voting leave is affected by the timing of an employee’s working hours and polling hours, whether voting leave is required, whether voting leave is paid or unpaid, what notice employees must provide, and posters or notices employers must provide. For example, California and New York both require employers to post a notice about voting rights at least 10 working days before the election.
STATE/LOCAL UPDATES
California: Time Off to Vote Notices. The California Elections Code requires employers to post a voting rights notice in the workplace 10 days before a statewide election. Sample notices in multiple languages are available on the state website: “Time off to Vote” Notices: California Secretary of State.
Illinois:
New E-Verify Requirements (eff 1/1/25). The Governor recently signed another amendment to the state’s Right to Privacy in the Workplace Act that provides additional employee protections when E-Verify is used to verify employment authorization. The amendment mostly strengthens existing protections by adding more specific employer obligations such as requiring employers to post and deliver detailed notices, adding specific time limits for notices about TNCs or upcoming I-9 inspections, and requiring 30 days of unpaid leave for employees to correct any discrepancies. It also specifically permits employees to have representation in any meeting regarding a TNC.
The purpose of the amendment appears to be ensuring that Illinois employers don’t exceed federal E-Verify regulations and requirements and treat all employees fairly by providing sufficient notice of upcoming investigations or TNCs so employees can prepare and respond.
Illinois has a history of attempting to ban the voluntary use of E-verify, and this amendment has raised concerns that some of the language appears to do just that (i.e. “Nothing in this Act shall be construed to require an employer to enroll in any Electronic Employment Verification System, including the E-Verify program…beyond those obligations that have been imposed upon them by federal law.”; [a]n employer shall not impose work authorization verification or re-verification requirements greater than those required by federal law.”). Some experts have speculated that the legislature was attempting to avoid a Constitutional challenge under the Supremacy Clause while still intending to bar the use of E-Verify, or at least cause enough confusion that employers would choose to forego using the E-Verify system. Ideally, the state will release further guidance clarifying its intent before the January effective date.
Pay Transparency. Illinois employers should be preparing for new pay transparency requirements (15+) going into effect January 1. Employers will be required to disclose the wage/salary range and a general description of benefits and other forms of compensation (i.e. bonuses, stock options, and other incentives) in all postings for jobs that will (i) be performed entirely or partly in Illinois or (ii) will be performed outside of Illinois if the employee will report to a supervisor, office or other work site in Illinois. In addition, employers are required to announce, post, or otherwise make known all opportunities for promotion to current employees no later than 14 calendar days after making an external job posting for the same position. It can take time to come up with pay scales that are in line with Equal Pay requirements, revise materials used for posting jobs, summarize benefits and determine how they will be disclosed, coordinate with any third parties posting jobs, and set up record-keeping standards, so it’s well worth it to start early.
Massachusetts: Revised Worker’s Compensation Poster. Massachusetts recently updated its workers’ compensation poster and notice requirements. The new poster must be posted by September 16, 2024, in a visible location accessible to all employees, or if no such location exists, distributed electronically or by regular mail.
In addition, employers must fill out the blank boxes in the notice to provide a contact name and phone number for worker’s compensation questions; the workers’ compensation insurance carrier name, address, and phone number; and the name of the medical facility that is the insurer’s preferred provider, if any, and the medical facility’s address and phone number.
The poster must be updated, reposted, and redistributed whenever any of the information changes.
New York State:
Time Off to Vote Poster. Election Law Section 3-110 requires employers to post a notice at least 10 working days before an election and until polls close. It must be posted in “the place of work where it can be seen as employees come or go to their place of work”. A link to a sample notice is included on the NY Board of Elections website under “Overview”: Time Off to Vote | New York State Board of Elections (ny.gov)
Retail Workplace Violence Prevention (eff 3/1/25). The Governor just signed the New York Retail Worker Safety Act requiring 10+ retail employers to assess potential violence hazards adopt a written workplace violence prevention policy, and include interactive training upon hire and annually thereafter. 500+ employers (nationwide) must also provide access to panic buttons or mobile phone-based panic buttons by 1/1/27. A retail employer is anyone employing at least ten retail employees … [at] a store that sells consumer commodities at retail and which is not primarily engaged in the sale of food for consumption on the premises”.
Vermont: Pay Transparency. Vermont will join many other states by requiring employers (5+) to disclose the compensation or pay range (but not benefits) in job postings beginning July 1, 2025. It applies to job openings that are either physically located in Vermont or remote positions that will predominantly perform work for an office or work location physically located in Vermont and also applies to internal transfers and promotions. Additional guidance from the Attorney General’s Office is expected by January 1.
Washington: Pay Transparency. Over 100 class action lawsuits have been filed alleging violations of the pay transparency statute, and have come down to the definition of an “applicant”. Employers are arguing that the initial plaintiff for the class action never intended to seek or accept a job with the company, and therefore was not a bona fide “applicant”. A lower court judge agreed, there was an appeal, and the appeals court has now paused its case to ask the Washington Supreme Court to decide what a plaintiff must prove to be deemed a “job applicant”. That decision will make or break most of the pending class action lawsuits, and could also have implications for other statutes that protect “applicants”. There is no current timeline for the decision, but in the meantime, Washington employers should continue to be diligent about disclosing pay scales, other compensation, and benefits in all job postings.
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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.