FEDERAL UPDATES
Exempt Salary Basis: Reminder that the exempt salary basis for executive, administrative, and professional employees will increase again on January 1, to $58,656 ($1,128 per week). It is then expected to increase every three years in July. Legal challenges have failed to this point, and the 5th Circuit recently rejected a claim that the DOL lacked the authority to set a salary threshold. Employers should prepare for this second increase by reviewing their exempt employee salaries and considering converting those below the new threshold to hourly non-exempt.
I-9 Green Card Extensions (eff. 9/10/24). USCIS has confirmed that it will automatically extend the validity of permanent resident cards (green cards) to 36 months for lawful permanent residents who have filed a Form I-90 extension to replace their cards. Previously the extension was limited to 24 months. I-90 receipt notices should now reflect a 36-month extension, and individuals with an existing receipt showing 24 months should receive an updated receipt. Employers presented with a receipt showing 24 months should ask the applicant/employee to contact USCIS to request an updated receipt.
EEOC Targeting Tech/STEM Employers. The EEOC just released a report titled “High Tech, Low Inclusion: Diversity in the High Tech Workforce and Sector 2014-2022” which found that certain populations (mainly Black, Hispanic, female, disabled, and older workers) are underrepresented due to “discriminatory barriers”. As a result, it warned that it intends to target this sector by proactively investigating/litigating discrimination and retaliation claims against these types of employers. Considering that the EEOC’s 2024-2028 Strategic Enforcement Plan also referenced the underrepresentation of women and workers of color in high-tech and STEM, these employers may want to carefully review their recruitment, hiring, equal pay, and discrimination policies and practices to identify any issues and ensure prompt action when they arise.
EEOC – First PWFA Lawsuit. The EEOC recently filed its first lawsuit under the Pregnant Worker Fairness Act, alleging that a Kentucky manufacturing company forced an employee who was 7 months pregnant to take leave rather than accommodating her request for a transfer to a position that didn’t require extensive bending or lying on her stomach. It also alleged that the Company violated the law by providing ADA disability paperwork, resulting in an impermissible medical inquiry. Although the case won’t be decided for some time, it is a warning to employers not to default to ADA paperwork for pregnancy accommodations, to carefully follow the requirements of the PWFA, and to reserve leave as a last resort after exhausting all other possible temporary accommodations. As a reminder, unlike the ADA the PWFA requires temporarily waiving one or more essential functions of the job absent significant undue hardship to the business.
The PWFA is fairly new, is extremely accommodating of pregnant employees, and covers “pregnancy, childbirth, and related medical conditions”, so can be much more expansive than the ADA or other similar laws. Employers should pause before denying any requested accommodations even remotely related to pregnancy (including lactation), review the regulations and EEOC guidance, and train managers to respond appropriately.
STATE/LOCAL UPDATES
Colorado. Holiday Incentive Pay Included for Overtime. The Colorado Supreme Court ruled that, unlike the FLSA, “holiday incentive pay” (not just regular holiday pay for non-work hours) should be included in the regular rate of pay for calculating overtime because it (i) falls under Colorado’s overtime pay definition that includes “all compensation paid to an employee”, and (ii) it qualifies as a shift differential.
Illinois. Off-Duty Marijuana Use. Illinois is one of numerous states legalizing recreational marijuana. A recent federal case suggests that, unlike other states, Illinois employers can adopt a zero-tolerance drug policy and terminate employees who test positive without having to prove that they used marijuana or were impaired in the workplace rather than on their private, off-duty time. The decision was based on the Illinois Cannabis Regulation and Tax Act, which the court interpreted as meaning that “employers may adopt a zero tolerance or drug-free workplace policy; zero tolerance or drug-free workplace policies need not be tied to ‘in the workplace’ conduct; such policies may be enforced through reasonable and nondiscriminatory random drug testing; and an employee may be terminated for violating the employer’s drug policy.”
Maine: Paid Family and Medical Leave. Employers will be required to start payroll withholding and submit quarterly wage reports to MDOL on January 1, 2025. Applications for private plan substitutions won’t be accepted until after April 1, 2025, so these employers will not be exempt until after their plan is approved, and in the meantime follow all state requirements. Employers with 15+ employees must contribute 1 percent of wages and may deduct up to half of this contribution from employee wages. Employers with fewer than 15 employees must contribute 0.5 percent of wages and may deduct the entire amount from employee wages. A second round of proposed rules is currently in the comment period and should be final by the effective date.
Maryland:
Pay Transparency (eff. 10/1/24). The MDOL updated its website just in time for the imminent effective date of a new law that requires employers to include a wage range, general description of benefits, and other compensation in all internal and external job “solicitations”. If the posting is “not available” to an applicant (for example, unsolicited applications), it must be provided to them before any discussion of compensation is held or upon request.
MDOL defines the “wage range” as the minimum and maximum hourly rate or salary, made in good faith by reference to one of the following:
- any applicable pay scale;
- any previously determined minimum and maximum hourly rate or salary for the position;
- the minimum and maximum hourly rate or salary for an individual holding a comparable position at the time of the posting; or
- the budgeted amount for the position.
The good news for employers is that the law does not include a private right of action so any complaints must be filed with the Commissioner of Labor and Industry, who may then order compliance and impose a civil penalty. The penalty for a 2nd violation is up to $300 per employee/applicant, and for subsequent violations within 3 years, it increases to $600 per employee/applicant.
FAQs, a voluntary “check the box” template, and sample narratives that satisfy the requirements are available on the Maryland.gov Division of Labor website.
Family and Medical Leave Updates (all employers). Contributions to the FAMLI insurance fund will begin July 1, 2025, and benefits will start a year later. Notices to employees will be required starting in January 2026. The state Department of Labor just released updated and expanded FAQs to help employers prepare and confirm that it will develop sample employee notices, reporting templates, and final regulations before the effective date.
Michigan: Minimum Wage and Tip Credits. The years-long battle over minimum wage and tip credits in Michigan continues. The Michigan Supreme Court just “clarified” some of the questions raised by its earlier July opinion, which found some previous legislative amendments unconstitutional. For now, the minimum wage is expected to increase to $12.48/hour on February 21, 2025, with an allowed tip credit of $6.49. The tip credit is scheduled to be phased out over the next 5 years. With this new information, the state labor department is expected to update its website with a schedule of the exact amounts shortly.
Washington: Pay Transparency – Many of the class action lawsuits alleging a violation of pay transparency requirements in job postings have been based on “straw man” applicants who never intended to pursue or accept the posted position. Employers have defended these allegations by claiming that the class representative was not a “bona fide applicant”, and therefore lacks standing to sue. That question is currently with the Washington Supreme Court. L&I has supported employers on this question, and in anticipation of a favorable court decision issued a preliminary EPOA rule that would formally define an applicant as “an individual, including existing employees, who submits in good faith an application for a job posting with the intent of gaining employment.” The rule is open for comments, and the final version is expected in mid-2025. While adoption wouldn’t eliminate the risk of class action lawsuits, it would make it much more difficult for plaintiff’s attorneys to engineer them.
Navigating the November Election and Its Aftermath
As the current election cycle inspires heightened political engagement, private-sector employers should consider proactive steps to mitigate legal and business risks while fostering a positive workplace culture. This requires striking a balance between respecting employees’ rights and ensuring a productive, cooperative, and positive work environment. Employers should be cautious when restricting political speech, but also diligent about addressing potential compliance issues and maintaining civility in the workplace. When striking this balance, consider the following:
Understand NRLA Protected Speech: While private employers generally have the right to regulate speech in the workplace, they should be cautious about restricting concerted activity or speech related to workplace conditions protected under the NLRA (even in non-unionized workplaces). For example, shutting down conversations or prohibiting displays of support for a candidate’s position on raising the minimum wage, paid sick leave, or health benefits could potentially violate the NLRA because of the relationship to terms and conditions of employment.
Communicate Policies: Employers should develop and communicate policies that set expectations for acceptable behavior regarding political speech. Often these are part of separate policies related to bullying, harassment, discrimination, dress codes, office décor, use of company resources, social media, civility, and others. It never hurts to remind employees of these policies and how they relate to political speech before an election. It is also crucial to train managers to ensure that policies are enforced neutrally and consistently to avoid any indication of favoritism or discrimination.
Balance Open Dialogue with Company Culture: While employees may have strong political opinions, employers can usually enforce policies that prohibit speech or behavior that conflicts with company values or disrupts the workplace. Political speech that aligns with hate speech or violates anti-discrimination laws can and should be restricted. Many employees believe that the First Amendment gives them a Constitutional right to say whatever they want, but except in a few states with similar state statutes, Free Speech only applies to government restrictions on speech, not private employers.
Manage Discrimination/Harassment Risks: Although federal and most state laws do not expressly protect political speech, anti-discrimination or anti-harassment laws can still be implicated if the speech involves a protected class. For example, arguments over a candidate’s position on abortion can potentially turn into a claim of discrimination, harassment, or a hostile work environment based on sex, especially if management takes sides. Regular training on respectful workplace behavior, civility, and anti-harassment policies, as well as careful monitoring and promptly addressing complaints, can help mitigate this risk.
Off-Duty Political Speech: Employers generally have limited authority over employees’ political activities outside of work. However, if off-duty speech negatively impacts the workplace, such as through social media, it may warrant action if it violates company policies, creates a hostile work environment, or significantly damages the Company’s reputation. Several states specifically protect off-duty conduct and privacy, so this requires careful evaluation before taking action.
Comply with State Laws: Several states have laws that prohibit employers from disciplining or restricting employees from expressing their political affiliations or views, and a few protect speech related to social justice or other issues. Some states also have laws that specifically protect off-duty political activities. Various leave laws may also apply. It’s important to understand applicable state laws to ensure that company policies don’t conflict and to avoid potential legal challenges.
Employer-Sponsored Political Activities: Some employers choose to be politically active, and may want to involve or persuade their employees to endorse certain candidates, attend political events or meetings, or make donations. These activities present several potential compliance pitfalls and can quickly devolve into claims of favoritism, discrimination, or harassment. The rules vary by state, with some jurisdictions prohibiting “captive audience” meetings altogether and others prohibiting employers from intimidating or coercing employees to vote a certain way. Know the law before sponsoring these activities or taking a position on a certain candidate.
Managing political speech in the workplace during an election year while also maintaining a positive and productive workplace culture and complying with applicable laws requires a careful and consistent approach. It’s important to be proactive before problems arise by understanding the NLRA and applicable state laws, clearly communicating company policies and enforcing them fairly and consistently, training managers when and how to intervene, and focusing on civility and inclusion rather than political affiliations and beliefs.
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.