Expanding Labor and Employment Laws

In recent years, cities and states across the country have been enacting laws designed to improve fairness in the workplace. Although these laws have been effective at bolstering the rights of employees, they also impose new costs and onerous administrative burdens on employers. As new laws and regulations are put into place, it is becoming increasingly important for organizations of all sizes across various industries to review the labor and employment laws that apply to them and ensure that their workplace policies and practices are compliant.

Requirements that Employers Provide Paid Sick Leave

One of the most rapidly growing employment law trends involves requirements that public and private-sector employers offer their employees paid sick leave. In April 2018, New Jersey became the tenth state to enact a paid sick leave law. Nine other states, including Arizona, California, and Washington, have also enacted similar laws, as well as major cities like Chicago and Philadelphia.
Paid sick leave laws are often seen as a reaction to another recent trend: employers implementing single, consolidated paid time off (PTO) policies. Critics were concerned that the increasingly common use of these policies would encourage employees to come to work when sick in an effort to conserve time off for much-needed vacations.
While the specific requirements of these new paid sick leave laws vary, most entitle employees to accrue leave at their usual rates of pay based on the number of hours that they work—up to a certain amount. Some laws cap an employee’s maximum annual number of paid sick leave hours according to the size of the organization. For example, Arizona’s law requires organizations with fifteen or more employees to provide up to 40 hours of paid sick leave per year, while those with fewer than fifteen employees only need to provide 24 hours per year. Under California’s law, employees accrue at least one hour of leave for every 30 hours that they work, but employers may limit their paid sick leave to 24 hours per year.

In defining the circumstances for which employees may take paid sick leave, most laws look beyond physical illness. They often encompass:

An employee’s mental illness
The physical or mental illness of the employee’s family member
Situations in which the employee or a family member has been a victim of domestic or sexual violence or stalking
Closure of the employee’s workplace or his or her child’s school for public health reasons

For organizations that employ individuals in jurisdictions with paid sick leave laws, it is particularly important to have reliable employee time-tracking systems in place. These systems enable organizations to accurately record the number of hours that employees actually work and the amount of leave they have accrued. Additionally, employers should review their existing time-off policies to ensure that they comply with local law.

Higher Minimum Wage Rates

Another way in which cities and states are taking action to improve the rights of workers is by enacting higher minimum wage rates. The federal minimum wage has been $7.25 per hour since 2008, and proponents of higher rates argue that this amount does not adequately cover a full-time employee’s living expenses—particularly in more expensive states like California. To rectify this situation, eighteen states increased their minimum wage rates at the beginning of 2018, including:

As part of the Healthy Working Families Initiative, which was approved by state voters in the 2016 election, the minimum wage will increase each year until it reaches $12 in 2020. For 2018, the rate is $10.50 per hour.
On January 1, 2018, the state’s minimum wage increased from $10 to $10.50 per hour for organizations with 25 or fewer employees, and from $10.50 to $11 for organizations with more than 25 employees. Annual increases will continue until the statewide rate reaches $15 per hour in 2023.
Beginning in 2018, the state’s minimum wage rate is $10.20 per hour—which represents a 90-cent increase over 2017.
Washington’s statewide minimum wage is $11.50 per hour for 2018 and is scheduled to increase each year until it reaches $13.50 in 2020. In Seattle, however, the minimum wage is currently $15 per hour for organizations with more than 500 employees and $14 for those with 500 or fewer employees.

New Restrictions on the Hiring Process

Some states have also enacted laws designed to improve equality in the hiring process. For example, 31 states, Washington, D.C., and more than 150 cities and counties across the U.S. have adopted “ban-the-box” initiatives, which prohibit public employers from seeking information about an applicant’s criminal background. Eleven of these states, including California, Minnesota, Oregon, and Washington, impose the same prohibition on private-sector employers. The goal of these laws is to help individuals with criminal records overcome common barriers to employment and become productive members of society.
In an attempt to rectify the gender wage gap, four states—California, Delaware, Massachusetts, and Oregon—now prohibit public and private-sector employers from inquiring about an applicant’s salary history. The theory behind these bans is that pay discrepancies between men and women tend to snowball over time; by restricting employers from relying on an individual’s previous salaries when determining the amount they will offer him or her, female applicants may have the opportunity to start anew with a fair salary.
As state and local governments increasingly become more conscious of workers’ rights, the trend of expanding labor and employment laws is expected to continue. Because laws may vary drastically from city to city and state to state, it is crucial for employers to consult an HR expert to ensure that their organizations are compliant. In addition, outsourcing certain HR functions, such as payroll and employee benefits administration, may help organizations save money—thus offsetting the additional costs that these new laws impose.