Looking Ahead: Challenging Compliance Trends for U.S. Employers

Happy New Year! We hope you took some time off during the holidays to recharge and reflect on the year just ended, and may 2020 bring you happiness, peace, and prosperity. With the changing of the calendar, however, come changes to employment laws and regulations. So put away the holiday decorations, take a break from football and shopping, drink a final toast to auld lang syne, and let’s look at key legal trends facing U.S. employers in 2020 and beyond. Sound like fun?

Governments across the United States continue to enact laws and pass rules addressing labor and employment issues. These developments present difficult compliance challenges for companies, especially those with operations in multiple states. Below are key U.S. employment trends to keep an eye on to ensure your organization complies in the months and years ahead:

Paid family and medical leave expansion.

Employers face a growing patchwork of state paid family and medical leave laws, with momentum building for further state laws and perhaps a paid federal family and medical leave law in the not so distant future. And a quick reminder, paid family and medical leave programs in Washington and Massachusetts entitle eligible employees to paid family and medical leave benefits beginning January 1, 2020 and 2021, respectively. Additionally, paid family and medical leave is coming to Connecticut in 2021 and to Oregon in 2023.

Workplace protections for victims of violence.

Several U.S. jurisdictions have passed or are considering passing laws requiring employers to accommodate or provide leave to employees who are victims of domestic violence, family violence, or gender-based violence, or whose family members are victims. Puerto Rico and the state of New York are two places that recently passed these laws with more states and cities likely to follow.

Predictive scheduling laws spreading to new industries.

Predictive scheduling laws require employers to follow certain scheduling practices, such as providing employees with written advance notice of their work schedules and paying additional wages if schedules are changed with too little notice. Although current predictive scheduling laws primarily cover food service, retail, and hospitality employers, this is changing, and these laws are beginning to spread to other industries as well. For example, Chicago’s Fair Workweek Ordinance that is set to take effect on July 1, 2020 will cover not only food service, retail, and hospitality employees, but also workers in the building services, healthcare, manufacturing, and warehouse services industries.

Overtime salary thresholds rising.

The standard salary level for the federal white-collar overtime exemptions was recently increased from $455 per week to $684 per week, leading to more than a million new American workers becoming eligible for overtime pay on January 1, 2020. Some states are also increasing the minimum salary threshold for white-collar exemptions under their laws. Employers must ensure they are well-versed with white-collar exemptions under both federal and state laws to avoid the sizable fines and collective actions associated with overtime violations.

Mandatory paid time off for any reason.

Many cities and states have passed laws compelling employers to provide paid time off (PTO) to employees for activities relating to illness and injury, safety, or family emergencies. Regarding these laws, however, a burgeoning trend is to mandate PTO for any purpose and not just for health or emergency reasons. In 2019, for example, mandatory PTO laws for “any reason” were passed in Maine, Nevada, and Bernalillo County (New Mexico), with more to come.

Increased employee misclassification enforcement.

It has never been easy for employers to determine whether a worker is an employee or independent contractor, and state and federal tests to help employers make this determination keep changing. Well, there is a big push in California, New Jersey, New York, and other states to make it more difficult for employers to establish that workers are independent contractors. This distinction is important because independent contractors commonly are not entitled to leaves of absence, overtime pay, unemployment compensation, or other legal protections afforded to employees. Watch for more states to enact laws making it more difficult for employers to classify workers as independent contractors.

Workplace Regulation Compliance

Employment laws and rules continuously evolve, but the pace of these changes will accelerate at all levels in this new decade. Today’s workers also desire shorter hours, condensed workweeks, doing their jobs remotely, and other workplace flexibility. Employers in every industry must ensure they comply with federal, state, county, and municipal regulations, as well as workplace policies. Remember, punishment for workplace protection violations can include money damages, fines, costs, injunctions, and even criminal penalties. It is more important than ever for organizations to stay on top of legal changes.