To help employers prepare for the new year, this Alert addresses certain legislative developments in 2015 that are likely to affect employers this year under federal law as well as in Illinois, California, Florida, New Jersey, New York, Washington D.C., Georgia, Michigan and Texas.
OSHA Recordkeeping and Reporting Requirements: The Occupational Safety and Health Administration (OSHA) has revised its list of industries partially exempt from keeping workplace injury and illness records. The new list can be accessed here. Effective January 1, 2015, employers subject to OSHA’s jurisdiction must report all work-related (1) fatalities, (2) inpatient hospitalizations of one or more employees, (3) amputations, or (4) losses of an eye. Work-related fatalities must be reported within 8 hours of discovery. Any inpatient hospitalization, amputation or loss of an eye must be reported within 24 hours of discovery. Under the previous rule, employers were required to report only fatalities and hospitalizations of three or more employees.
Minimum Wage Requirements for Federal Contractors: Executive Order 13658 (13658), entitled “Establishing a Minimum Wage for Contractors,” will apply to covered contracts and replacements for expiring contracts that result from solicitations issued on or after January 1, 2015 and contracts that are awarded outside the solicitation process on or after January 1, 2015. 13658 provides that federal contractors must pay workers performing work on or in connection with covered contracts at least $10.10 per hour, such rate being subject to increase annually. (For more information about 13658, see Schiff Hardin’s February 20, 2014 Federal Contractor Update.) 13658 applies only to: (1) service contracts covered under the Service Contract Act, (2) procurement contracts for construction covered under the Davis-Bacon Act, (3) concessions contracts, and (4) contracts entered into in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. Contracting agencies will be required to include a contract clause specifying the minimum wage requirements in accordance with applicable regulations. Among other exclusions, the Order does not apply to certain types of manufacturing contracts, or to exempt employees under the Fair Labor Standards Act and non-exempt employees who spend less than 20% of work hours in a given week performing work in connection with a covered contract.
Final Rule Implementing New Anti-Discrimination Provisions for Federal Contractors: In December 2014, the Department of Labor announced a Final Rule to implement Executive Order 13672 (13672), which extends the anti-discrimination requirements and other provisions of Executive Order 11246 (11246) to lesbian, gay, bisexual and transgender applicants and employees. (For a discussion of 13672, see Schiff Hardin’s August 12, 2014 Federal Contractor Update.) The Final Rule updates the existing equal opportunity clause to include these new categories, and federal contractors must include the updated clause in new or modified subcontracts and purchase orders, ensure that applicants and employees are treated without regard to their sexual orientation and gender identity, update the equal opportunity language used in job solicitations, and post updated anti-discrimination notices. Contractors will not be required to collect or analyze data with respect to the sexual orientation or gender identity of applicants or employees, or set placement goals on these bases. The Final Rule will become effective April 8, 2015 and will apply to contracts entered into or modified on or after that date.
Reasonable Accommodations for New and Expectant Mothers: Effective January 1, 2015, all employers, regardless of size, must provide reasonable accommodations to new or expecting mothers based on pregnancy, childbirth and medical or common conditions related to pregnancy, unless the employer can demonstrate that such accommodations would impose an undue hardship. (For more information about this amendment to the Illinois Human Rights Act, see Schiff Hardin’s September 12, 2014 Illinois Legislative Update.) If an employer maintains an employee handbook, the handbook must now include a summary of the requirements of the law and information pertaining to the filing of a charge. The handbook must also provide notification of an employee’s right to be “free from unlawful discrimination” and to receive “certain reasonable accommodations.” Additionally, the law requires the posting of an approved notice in a conspicuous location on the premises of the employer. The approved Illinois Department of Human Rights’ poster can be downloaded here.
“Ban the Box”: Effective January 1, 2015, with some limited exceptions, Illinois employers with 15 or more employees, and employment agencies, may not inquire into or consider a job applicant’s criminal record or criminal history until after the employer determines that the applicant is qualified for the position and either 1) notifies the applicant that he or she has been selected for an interview, or 2) if there is no interview, makes a conditional offer of employment to the applicant. Most employers, therefore, should consider removing any inquiry into an applicant’s criminal history from job applications and other applicant forms or processes that are utilized prior to such notification and/or job offer to an applicant. (For further discussion of the Job Opportunities for Qualified Applicants Act, see Schiff Hardin’s August 6, 2014 alert.)
Chicago Minimum Wage Increase: Effective July 1, 2015, a Chicago minimum wage increase goes into effect increasing the minimum wage to $10.00 per hour. The ordinance applies to most private employers in Chicago and employees of the City of Chicago. The ordinance does not apply to “Sister Agencies” in Chicago such as the Chicago Park District, Chicago Transit Authority, City Colleges of Chicago, Chicago Housing Authority, or the Public Building Commission. The minimum wage will increase in subsequent years to $13.00 per hour by July 1, 2019. The minimum wage for tipped employees will increase by $0.50 per hour effective July 1, 2015, and will increase again by $1.00 per hour effective July 1, 2016. Thereafter, the minimum wage for hourly and tipped-hourly employees will increase annually in proportion to the increase, if any, in the consumer price index (CPI). If the CPI increases by more than 2.5 percent in any year, the Chicago minimum wage increase will be capped at 2.5 percent. However, there will not be a Chicago minimum wage increase in any year the Chicago unemployment rate exceeds 8.4 percent.
Payroll Debit Cards: Effective January 1, 2014, payroll debit cards will be added to the list of traditional wage payment methods (such as check and direct deposit) permitted by the Illinois Wage Payment and Collection Act. Employers that plan to offer employees this option will be required to comply with certain notice and payroll debit card program requirements. (For more information about use of payroll debit cards, see Schiff Hardin’s September 12, 2014 Illinois Legislative Update.)
Expanded Rights for Unpaid Interns: Effective January 1, 2015, Illinois’ prohibitions on sexual harassment in the workplace will extend to unpaid interns. An unpaid intern is defined as an individual working for the employer who (1) the employer is not committed to hiring at the conclusion of the intern’s tenure, (2) is not entitled to wages, and (3) performs work that supplements education, provides a benefit for the person performing the work, does not displace regular employees and provides no immediate advantage to the employer.
Mandatory Paid Sick Leave: Effective July 1, 2015, AB 122, the Healthy Workplaces, Healthy Families Act of 2014 (HWHFA) requires employers to provide paid sick leave to employees who work in California for 30 or more days a year at an accrual rate of one hour for every 30 hours worked. Employers may cap employee accrual of paid sick leave to 24 hours (three days) per year, and a maximum cap on total accrual of 48 hours (six days). HWHFA applies to all employees, including part-time and exempt employees.
Joint Liability for Labor Contractors Violations: Effective January 1, 2015, AB 1897 requires a “client employer” that contracts for labor to share liability with a labor contractor that fails to comply with wage and hour requirements or obtain valid workers’ compensation coverage. A “labor contractor” is defined as an individual or entity that supplies workers to perform labor “within the client employer’s usual course of business.” The law does not apply to employers who have 25 or fewer employees or who engage fewer than five employees from the labor contractor. The law excludes non-profit community based organizations, labor organizations or apprenticeship programs, and motion picture payroll services companies from its coverage.
Discrimination Protection for Unpaid Interns: Effective January 1, 2015, AB 1443 amends the Fair Employment and Housing Act (FEHA) to extend protection against discrimination and harassment to unpaid interns and volunteers. AB 1443 prohibits employers from discriminating against individuals participating in an unpaid internship on the basis of any protected classification, prohibits sexual harassment of those individuals, and extends to them the duty to accommodate religious beliefs.
Non-Discrimination Based on Driver’s License for Undocumented Workers: The FEHA includes protection against discrimination on the basis of national origin. Under AB 1660, effective January 1, 2015, “national origin” discrimination includes discrimination on the basis of possessing a driver’s license granted under Section 12801.9 of the Vehicle Code. That section requires the Department of Motor Vehicles to issue a license to people who are not in the country legally if they’re otherwise qualified for the license. These licenses indicate on their face that the holder is allowed to drive, but the license “does not establish eligibility for employment, voter registration, or public benefits.” Under AB 1660, it is a violation of the FEHA for employers to discriminate against employees because they hold such licenses. Employers also are prohibited from requiring individuals to present such licenses, unless possessing a license is required by the employer and the employer’s requirement is permitted by law. The bill does not alter an employer’s rights or obligations regarding obtaining documentation evidencing identity and authorization for employment (e.g., in order to complete an I-9 form) under the federal Immigration and Nationality Act.
“Anti-Bullying” Training Required: Existing California law requires mandatory training of supervisors in harassment prevention. Beginning January 1, 2015, amendments to that law enacted by AB 2053 require that this training address the prevention of “abusive conduct.” “Abusive conduct” is defined as “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.” This conduct “may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” While AB 2053 requires training on how to prevent abusive conduct, such conduct is not actionable as a violation of FEHA, unless it involves unlawful discrimination or harassment against a protected class.
Protections for Undocumented Workers Who Make Complaints Under the Labor Code: Effective January 1, 2015, AB 2751 amends California Labor Code section 1019 to expand protections to workers who make complaints under the California labor code. Under current law, a court may order the suspension of an employer’s business license if it is found to have engaged in an “unfair immigration-related practice” in retaliation for the exercise of a workplace right. Current law defines an “unfair immigration-related practice” to include threatening to file or filing a false police report, or threatening to contact or contacting immigration authorities. AB 2751 expands the definition of an “unfair immigration-related practice” to also include threatening to file or filing a false report or complaint with any state or federal agency. AB 2751 also provides that an employer may not discriminate or retaliate against an employee because that employee updates his or her personal information, limited to a lawful change of name, social security number, or federal employment authorization document. AB 2751 further clarifies that the $10,000 penalty against an employer who discriminates or retaliates against an employee who complains about Labor Code violations will be awarded to the employee or employees who “suffered the violation.”
Time off for Emergency Rescue Personnel: Labor Code section 230.3 prohibits an employer from discriminating against an employee for taking time off to perform emergency duty as a volunteer firefighter, a reserve peace officer, or emergency rescue personnel. Effective January 1, 2015, AB 2536 expands those protections to include an officer, employee, or member of a disaster medical response entity or requested by the state. The law requires employees of health care providers to notify their employer at the time they are designated as emergency rescue personnel and when they learn that they will be deployed.
Antidiscrimination Against Public Assistance Recipients: AB 1792 prohibits employers from discharging, discriminating, or retaliating against an employee who enrolls in Medi-Cal, refusing to hire a Medi-Cal beneficiary, or disclosing to any person that an employee receives or is applying for Medi-Cal, unless authorized by federal law. The law also requires state agencies to prepare an annual list of the top 500 employers with the most number of employees enrolled in a public assistance program. The reports will be made public and will be prepared starting January 2016.
OSHA Workplace Safety Reports: AB 326 provides that employers may now email reports of an employee’s serious injury, illness, or death to OSHA. This law changes the previous wording in Labor Code section 6409.1 stating that the report could be made by “telephone or telegraph.”
Increased Data Breach Protection: Effective January 1, 2015, AB 1710 changes existing data breach laws in California. First, AB 1710 requires businesses that maintain personal information about California residents to implement and maintain reasonable security procedures and practices to protect that information from unauthorized access, destruction, use, modification, or disclosure. “Personal information” includes an individual’s social security number, medical information, financial account information or driver’s license number. AB 1710 also requires that a company offer to provide identify theft prevention and mitigation services at no cost to the affected person for at least 12 months if the breach exposed social security numbers or driver’s license numbers.
Increase in Pay Rate for Exempt Computer Software Employees: California Labor Code section 515.5 provides that certain computer software employees are exempt from overtime compensation. One requirement for the exemption is that the employee’s hourly rate or monthly salary meet or exceed a certain threshold. Effective January 1, 2015, the California Department of Industrial Relations increased the minimum hourly rate of pay for a computer software employee to qualify for the exemption from $40.38 to $41.27, and the minimum monthly salary exemption from $7,010.88 to $7,165.12.
Minimum Wage Increases: Effective January 1, 2015, San Jose and Sunnyvale increased their minimum wage to $10.30 per hour, Oakland increased its minimum wage to $12.25 per hour, and San Francisco increased its minimum wage to $11.05 per hour. An additional increase will take effect in San Francisco on May 1, 2015 to $12.25 per hour.
San Francisco Retail Workers Bill of Rights: The San Francisco Board of Supervisors passed the Retail Workers Bill of Rights in November 2014. The ordinances contain two separate pieces of legislation aimed at hours and retention protections and fair scheduling and treatment. Effective January 5, 2015, the law requires that businesses with 20 or more locations worldwide and 20 or more employees in San Francisco: (1) offer more hours to existing part-time employees before hiring additional part-time workers; (2) post schedules at least two weeks in advance; and (3) provide two to four hours of pay to an employee at his or her regular rate of pay when he or she is required to be “on call” for a specified shift but the employer cancels the shift with less than 24 hours’ notice. The law also prohibits employers from discriminating against part-time employees in terms of pay or promotions. If the employer’s company is bought or sold, the law requires that workers be allowed to continue working at their jobs for at least a 90-day trial period.
Minimum Wage Increase: Effective January 1, 2015, Florida’s minimum wage increases to $8.05, while tipped employee minimum wage increases to $5.03 with a maximum tip credit of $3.03 per hour worked.
Minimum Wage Increase: Effective January 1, 2015, New Jersey’s minimum wage increases to $8.38 per hour.
Paid Sick Leave: Paid sick leave ordinances have been enacted for private employers in Newark, Jersey City, Passaic, East Orange, Irvington, Paterson, Montclair and Trenton. (A statewide bill was introduced in the legislature in mid-December 2014, but its future is not certain.)
“Ban the Box”: Effective March 15, 2015, New Jersey will implement its “ban the box” legislation (officially known as the “Opportunity to Compete Act”), prohibiting most New Jersey employers with more than 15 employees from inquiring about an applicant’s criminal record until after an initial interview has been held.
Minimum Wage Increase: On December 31, 2014, the statewide minimum wage in New York for non-exempt (overtime-eligible) employees goes from $8.00 to $8.75 per hour, and then to $9.00 per hour on December 31, 2015. The minimum weekly salary for exempt executive and administrative employees will also increase December 31, 2014 from $600.00 to $656.25 per week, and then to $675.00 per week on December 31, 2015. Wages for tipped employees in the hospitality industry are also impacted effective December 31, 2014. For food service workers, the “tip credit,” which permits employers to pay tipped employees less than the minimum wage so long as the employees earn enough gratuities to make up the difference, will increase from $3.00 to $3.75 per hour, and then to $4.00 per hour December 31, 2015. Thus, the “tipped minimum wage” for such workers will remain at $5.00 per hour, provided that tips plus wages equal or exceed the applicable minimum wage ($8.75 per hour as of December 31, 2014). The minimum overtime rate for these workers will increase to $9.375 per hour. For non-food service workers (other than those at resort hotels), the tip credit will rise from $2.35 to $3.10 per hour, although the tipped minimum wage for such workers will remain $5.65 per hour. Certain meal and lodging credits, as well as uniform maintenance pay for employers that do not maintain required uniforms, are also scheduled to increase.
Annual Wage Notices: On December 29, 2014, Governor Cuomo signed a bill eliminating the requirement under the Wage Theft Prevention Act that New York employers provide annual wage notices to their employees. The Governor has made clear that the effective date of the bill will be accelerated such that the notice requirement is removed for employers for the 2015 calendar year.
“Ban the Box”: Effective December 17, 2014, the Fair Criminal Record Screening Act of 2014 prohibits employers with 10 or more employees from inquiring about or requiring an applicant to disclose an arrest or criminal accusation that did not result in a conviction. Employers also may not inquire about or require an applicant to disclose a criminal conviction until after a conditional offer of employment has been made. Once a conditional offer of employment is made, it may only be withdrawn because of an applicant’s criminal conviction for a legitimate business reason. A legitimate business reason must be reasonable when considering the specific job duties and responsibilities, the effect the crime will have on the applicant’s ability to perform those duties and responsibilities, the time elapsed since the commission of the crime, the applicant’s age when the crime was committed, the frequency and seriousness of the crime, and any indication of rehabilitation and good conduct. The Act does not apply where federal or District law requires consideration of an applicant’s criminal history or to any employer that provides services to minors or vulnerable adults.
Minimum Wage Increase: Under the Minimum Wage Amendment Act of 2013, the District of Columbia’s minimum hourly wage increased effective July 1, 2014 from $8.25 to $9.50. The minimum wage will increase again to $10.50 on July 1, 2015 and to $11.50 on July 1, 2016.
Recreational and Medical Marijuana: On July 29, 2014, District of Columbia Mayor Gray signed emergency legislation that broadly expanded access to medical marijuana. The law expired on October 27, 2014, but District Council members have indicated that in January 2015, they will send the Medical Marijuana Expansion Amendment Act of 2014 to Congress for the required 30-day review. Currently, only five medical conditions qualify District residents to apply for the purchase of legal marijuana. The Act will provide doctors with discretion to determine whether a patient with a debilitating condition might benefit from medical marijuana. Ballot Initiative 71 that would legalize recreational marijuana remains blocked by the current omnibus spending bill. (The District Council Chairman has indicated that he will submit a proposal to Congress in January 2015 implementing the initiative, which could result in implementation within 30 days thereafter.) If recreational marijuana is legalized, under the Act employers would not be required to permit or accommodate the use of marijuana, and their ability to establish and enforce policies restricting the use of marijuana would not be affected.
Georgia, Michigan, Texas
No significant employment-related statutory developments are to take effect in 2015 in Georgia, Michigan or Texas.
For more information on these legislative developments, please contact any member of Schiff Hardin’s Labor & Employment Group.