State of the States: Navigating Trends in Local Compliance
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This document summarizes recent trends in state and local HR compliance laws. It notes that federal involvement in HR compliance is decreasing, so focusing on local regulations is important. Key areas discussed include equal pay, "ban the box" laws restricting questions about criminal history, overtime exemption thresholds increasing in some states, rising minimum wages in many states and cities, expanding paid leave requirements, and the complex legal issues around medical marijuana usage. The document advises employers operating in multiple jurisdictions to apply the most generous policies to avoid employee relations problems and to stay up to date on the changing compliance landscape.
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State of the States: Navigating Trends in Local Compliance
- 1. State of the States Navigating Local Trends in HR Compliance
- 2. Manuel Martinez-Herrera VP, Legal & Compliance Andy Przystanski Sr. HR Content Specialist Namely is an all-in-on HR Platform your employees will actually love to use. Namely combines HRIS, payroll, talent management, and benefits on one powerful, easy-to-use platform.
- 3. Why Focus on Local Compliance in 2017?
- 4. Why Focus on Local Compliance in 2017? We are seeing a rollback of federal involvement in HR compliance: • Conservative DOL under Alex Acosta • “For every new regulation, remove two” • GOP control of Congress • Stalled overtime reform • Potential repeal of ACA
- 5. “At these stormy times of instability and confusion, let New York serve as a safe harbor for the progressive principles and social justice that made America.” NY Governor Andrew Cuomo
- 6. Topics E Q U A L PAY B A N T H E B O X O V E RT I M E M I N I M U M WA G E PA I D L E AV E M A R I J U A N A R E G I O N A L T R E N D S
- 7. Equal Pay
- 8. Equal Pay California (started in 2016) “Substantially similar,” not “equal” work Maryland (started 2016) Covers gender and gender identity Right to discuss pay w/ co-workers Massachusetts (enacted in 2016, starts 2018) Banning use of salary history in job interviews Model for future equal pay laws $1.00 $0.80 Pay Gap Men Women 2015, US Census Bureau
- 9. Equal Pay Recent salary history bans Philadelphia (All Employers) – contested! New Orleans (City Agencies) Puerto Rico (All Employers) Pittsburgh (City Agencies) New: New York City and Delaware (All Employers) In the Works? New Jersey, New York State and Pennsylvania Federal bill, but unlikely to pass
- 10. Take a close look at pay equity at your company, enlisting legal counsel’s help if this your first time. Consider omitting salary history questions from your recruiting process and job application forms. NAMELY TIP
- 11. Ban the Box
- 12. Ban the Box Eliminating criminal history from job applications and recruiting process 9 states with restrictions that apply to private employers Connecticut (January 1, 2017) Other states: Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Vermont 15 states with restrictions that apply only to public employers Up next? California and New York
- 13. Ban the Box
- 14. Ban the Box 150+ city ordinances, local activity is high 2016 Notables: Los Angeles, Austin Factors to consider internally: Ask after first interview? Ask after conditional offer? Note: Some jobs may require a background check early, per federal law Support for the trend is bipartisan
- 15. Err on the side of caution and consider omitting the question from your job applications and your recruiting process, even in the absence of a state/city requirement. NAMELY TIP
- 16. Overtime
- 17. Overtime Federal rules in flux— Court injunction blocking the Obama’s increase to $47,476 2004 threshold of $23,660 still in place, DOL not contesting court decision Alex Acosta at his DOL hearing: “If you were to apply a straight inflation adjustment, I believe the figure if it were to be updated would be somewhere around $33,000, give or take.”
- 18. Overtime 19 states have their own overtime rules States start exceeding DOL threshold: California Minimum Wage x 2 x 40 Today: $840 per week ( $43,680 per year) 2022: $1,200 per week ( $62,400 per year) New York 3 thresholds based on region, gradual increase NYC (10+ employees): Today: $42,900, 2018: $58,500
- 19. If you’re a NY or CA employer, your overtime threshold will go up regardless of the DOL. For everyone else, sit tight for a federal increase to around $33k. NAMELY TIP
- 20. Minimum Wage
- 21. Minimum Wage Federal Minimum Wage: $7.25 (2007) 29 states & Washington D.C. have higher rates Highest now: Washington, D.C. ($12.50 effective July) Moving to $15: California, New York, Seattle and Washington, D.C. At least 19 other state/city rates going up in 2017
- 22. Minimum Wage
- 23. Minimum Wage New: Increases by the ballot box 2014: Alaska, Arkansas, Nebraska and South Dakota 2016: Arizona, Colorado, Maine and Washington D.C. “Ruby red” states are approving minimum wage ballot measures Why? Individuals vote as employees, not employers
- 24. New increases are phased and often geography-based. Make it a habit to check in on your state, city, and county minimums at least twice a year. NAMELY TIP
- 25. Paid Leave
- 26. Paid Leave States: Arizona, California, Connecticut, Massachusetts, Oregon, Vermont, Washington, Washington D.C., New York Cities in: California, Illinois, Maryland, Minnesota, New Jersey, New York, Pennsylvania and Washington (2015-2016) Particularly complex issue for multistate employers Offer most generous plan or not?
- 27. Paid Leave
- 28. If you’re multistate, note that offering separate leave policies for each state/city may cause employee relations issues. Cost permitting, upgrade your policies and practices to meet the most generous requirements. NAMELY TIP
- 29. Marijuana
- 30. Marijuana in the Workplace Medical: lawful in 27 states plus D.C. 2016 ballot initiatives: Arkansas, Florida and Montana 2016 legislative initiatives: Ohio and Pennsylvania 8 states decriminalize recreational use, too 2016 ballot alone: California, Massachusetts, Maine and Nevada Employment Protections Recreational: probably none, except Maine Medical: depends on state California, Pennsylvania
- 31. Most jurisdictions allow companies to set zero-tolerance policies, but confirm with legal counsel to see if your city/state requires you to make reasonable accommodations to medical marijuana users. NAMELY TIP
- 32. Other Trends
- 33. Other Trends “Open Carry” Laws Texas: Employers can prohibit guns in the workplace, but not in employee’s parked car. Ohio: Firearms ok, but only if locked away in glove compartment Similar proposal in Pennsylvania Protection for job applicants’ credit history (D.C., 2016) Makes “credit information” a protected trait alongside traditional factors like race and gender
- 34. States Push Back? State Preemption Laws 10 proposals just this year Ohio: broad ban on local wage & hour laws Texas: Attempt to curb local ban- the-box laws Proposals in many states, including Minnesota and Pennsylvania Notable example: Last year, the Kentucky Supreme Court scrapped Louisville’s $9 minimum wage…after it took effect.
- 35. The HR compliance landscape is getting more diverse and complex. Follow Namely’s HR News for the latest! hrnews.namely.com NAMELY TIP
- 36. The Last Word
- 37. The Last Word 1. When rules contradict, the ones most generous to the employees should be applied 2. As trends spread, consider current practice vs. actual risk: (e.g., is asking about criminal history or salary history really worth compliance risk?) 3. Top trend to watch in 2017: salary history bans 4. Don’t count Washington out just yet! Too many unknowns about President Trump’s stances on paid leave, minimum wage, equal pay, and more
- 38. QUESTIONS?
- 39. THANK YOU
Notes de l'éditeur
- Manuel Intros Himself Andy Przystanski, Senior HR Content Specialist here at Namely. Employment law and HR trends writer. 7 Years in HR and legal space Excited to be here today Both members of the team here at Namely, an all-in-one HR, payroll, and benefits platform for midsize companies. You can find out more about us at Namely.com.
- Telling quote from New York governor Cuomo. At these stormy times of instability and confusion, let New York serve as a safe harbor for the progressive principles and social justice that made America. This is the attitude we’re talking about here. It’s a “if Washington won’t do it, we will” approach. That’s why our thesis is that activity at the local level will be significantly higher than in past years, particularly in blue state jurisdictions like New York and California, and cities across the country. With both politicians and labor groups looking to distance themselves from an increasingly pro-employer Washington, we expect plenty of minimum wage, paid leave, and other laws to be passed in an effort to make a statement.
- So here are the trends we’ll cover in detail today. We’ll touch on Equal Pay, the Ban the Box Movement (which if you don’t know what that means, you’ll soon find out), overtime rules, the minimum wage, paid leave, marijuana, and regional trends—the latter section being a grab bag of emerging topics and trends we see being important going into the second half of 2017 and beyond. Without further ado, here’s Manuel here to talk about equal pay.
- Manuel
- Ban the Box
- So Ban the Box. If you didn’t already know, the box that has so many politicans and activist groups riled up is the “have you ever been convicted for a crime?” question you might traditionally see on job applications. The movement has been around since 2004, and probably for good reason—1 out of 4 Americans have some form of criminal history, and if you’re screening candidates for criminal history from the start, you’re probably unfairly eliminating a large swath of the workforce before the first interview Right now, 9 states have laws on the books covering private employers. 15 more have laws for state workers. Connecticut is one of the newest states to pass a ban for private employers.
- Here’s a quick look at some of those states with ban the box laws.
- So if you thought this was a big state trend…Activity has been even higher at the city level, with 150+ cities so far instituting a ban the box law. Now, what do these laws actually look like? What’s forbidden and what isnt? Unfortunately, laws seemingly as simple as ban the box don’t have one set model. Some of these laws place limits on just asking about criminal history during the job application, others extend those limits through the application process all the way to the conditional offer of employment. Check with your local state department of labor to confirm whether your practices are in compliance. There’s another element to this too—some jobs do require a background check per federal and state law, like those involving child care. While that may seem to create a contradiction in ban the box jurisdictions, they don’t—most of these ban the box laws are built with a exception for these special cases. And last but not least, the ban the box trend has become something of a rarity in today’s politics—an issue with bipartisan support from the likes of Democrats like Cory Booker and Republicans like Rand Paul. We saw a federal law introduced in the Senate earlier this year, so we’ll monitor that law’s progress closely.
- So here’s our tip. Ban the box isn’t going anywhere—it would be wise to consider omitting the question from the job application and recruiting process if you can, even in the absence of an existing requirement. With state and city laws already passed, the majority of the US already lives in a ban the box jurisdiction—we don’t see this trend slowing down anytime soon.
- On to overtime, a favorite subject of mine. When I started focusing on employment law and compliance at Namely, the DOL has just released its proposed overtime reforms. Little did I know we’d still be talking about it halfway through 2017.
- Ok, so overtime. Unless you were sleeping under an HR rock last year, you heard all about overtime last year. Last year, the DOL under President Obama tried to double the minimum salary to exempt someone from overtime from $23,660, to $46,476 per year—a number I’ve since memorized due to all the coverage we had. Just weeks before the new rule’s original december 1 effective date, while most of us were eagerly looking forward to our thanksgiving dinners, a federal judge in Texas stepped in a issued a preliminary injunction after 21 state governors and the US Chamber of Commerce sued over the change. Long story short, the threshold remains at $23.660 for the time being. Secretary of Labor Alex Acosta has said he would not defend the rule in court, but that doesn’t necessarilly mean he’s against an increase altogether. At his confirmation hearing he voiced support for an increase along the lines of $33,000 to keep pace with inflation. That modest increase is also coincidentally along the lines of what SHRM appears to support. More to come here as the DOL continues to collect feedback from the HR and employer community.
- So this is a presentation on local/state rules changing…why bring up the DOL at all? There’s a good reason, trust us. Because overtime reform stalled last year at the federal level, we think states are going to move ahead with their own increases. In fact, we’re already starting to see that happen. Currently 19 states have their own overtime rules, but most of those variations are minor and don’t involve something as consequential as the salary threshold. California and New York, as they often do, are bucking that tradition. So California, a state near and dear to the hearts of many HR profressionals, has an interesting way of setting the overtime threshold—it’s an equation involving the state minimum wage. Last year, California became the first state to pass a historic $15 minimum wage law, meaning that the overtime threshold, in connection to that, will also go up. With minimum wage increases that are already, the overtime threshold in California will reach about $62,000— significantly higher than the $47,476 figure that much of the HR community was up in arms over. Interestingly, earlier this year California lawmakers proposed increasing the threshold in the short term to the $47,476 number that the Obama administration sought to realize in 2016. The fact they used the exact same number isn’t a coincidence, and hits back at our thesis that lawmakers are trying to make a statement in light of percieved inaction at the federal level. New York State, not wanting to be late to the party, has acted on overtime too. Late last year, the state set new overtime thresholds across the state by county and put forward a schedule of increase. In New York City, for example, the threshold will reach $58,500 by 2018!
- So here’s the bottom line…Change to overtime isn’t going anywhere. States will act even if the DOL doesn’t, and already New York and California have done so. The only certainty is change, and we think this is also the case at the federal level. Expect the DOL to release a new final rule by the end of the year, increasing the threshold to around $33k. We’ll monitor things closely to see.
- Another quickly evolving trend has been paid family and sick leave. Let’s take a look at where things stand right now.
- Movement on paid leave at the state and city level has been starting to heat up slowly, and last year was an important turning point. 3 States currently offer paid family leave, and 5 states offer sick leave. There are a handful of other jurisdictions with laws signed but whose full implementation is still pending. A notable addition to the list is New York State, who last year passed its first ever paid family leave law. That program takes effect gradually, and when in full effect in 2020 will offer mothers and fathers up to 12 weeks paid our at 67 percent of regular wages. Compared to other programs, that’s fairly generous. Washington DC has a similarly generous new law, but it hasn’t been implemented quite yet due to questions about its funding. Interestingly enough, we may just yet see a federal program in the works. President Trump’s draft budget did include a modest paid family leave program for mothers and fathers, so we could potentially see action at broader level if Congress is on board. All of these laws have created a complex patchwork for multistate employers to navigate though. Do you offer the most generous plan or opt to have separate handbooks for each office? We’ll touch on that later.
- Here’s a snapshot of how many state and local paid leave laws have been enacted since 2006. One thing this chart doesn’t quite represent are the amendments to existing laws, or how they are becoming increasingly generous with time. For example, last year San Francisco enacted an ordinance that boosted its paid family leave benefit to 100 percent of regular wages. That was unprecedented, and could potentially sway other jurisdictions to do the same.
- So given how many different states and cities have their own paid leave programs, here’s our tip: offering separate policies for every office can be messy, and pose employee relations issues. We recommend upgrading your policies and practices to meet the most generous requirements. And given the upward trend of many of these laws, they’re getting more generous anyway.
- So, a number of states have passed so-called ”open carry” laws, loosening up restrictions on where people can bring firearms. The implications on the workplace understandably make a lot of HR professionals uncomfortable, so the question remains—do you have the right to make a policy barring weapons in the office? Yes, you still do—to an extent. It depends how you define company property. Most of these laws have considered employer concerns, and do allow HR to bar guns from the office. After all, in a state like Texas, property rights are almost just as important as gun rights to legislators. In these cases, like in Texas and Ohio, employees can be barred from bringing weapons to the office—but not limited from keeping them in a locked car in the office parking lot. Understandably, that still leaves a lot to be desired. Technically, the office parking lot can still private property. A number of organizations have lobbied for tougher restrictions here, and we’ll see how things pan out. Another trend we’re seeing is the elevation of credit history into a sort of quasi-protected trait. Like salary history bans, we expect these to become more common. Washington DC just passed its own version of a ban last year. As with salary history, consider whether you actually need to ask. While credit history may make sense in special cases, in most others it poses an unnecessary risk.