Armanino Blog

More Risky Business: New Labor Rules to Watch Out For

by Jenn McCabe
May 01, 2019

Labor statutes change multiple times per year, and states vary in their application of these changes. This year is no exception. Labor rules changed again in over half the U.S. on January 1, 2019, and there have been additional changes, as well. Here's a short list of what you may need to update in your own HR policies.

Overtime. In March, the Department of Labor announced a rule that makes another million Americans eligible for overtime pay in 2020.

  • The overtime rules may seem crazy, but don't try to cheat with hinky workarounds when it comes to classifying a worker as exempt from OT.
    • The salary level below which a person must be made eligible for overtime pay is $35,308/year. Note that the Obama administration had proposed a wage level of $47,476, so this is a bit friendlier, but still...

Caution: If this affects your workers, communicate in advance to avoid a stampede.

Harassment - Many states are updating legislation regarding harassment, particularly sexual harassment.

  • Victims of sexual harassment may no longer be required to adhere to non-disclosure agreements regarding settlements.
    • Mandatory sexual harassment prevention training is being required more often, and for companies with as few as five (!) employees.
    • The definition of what qualifies as harassment is being broadened to include behavior that may not qualify under the prior "severe and pervasive" guideline.

Caution: Some employers are adopting "zero tolerance" policies to discourage bad behavior. That certainly may help, but it also may not be fair to the accused worker.

Marijuana – Depending on the state in which you employ workers, you may or may not be able to discriminate against legal marijuana users. Can you test? Maybe...

Caution: Do you have some, but not all, jobs where testing should be required? That's messy.

Hiring - Hiring is getting more complicated due to additional protections provided to applicants. Make sure your background check policies are up to date.

  • You may no longer be allowed to request salary history information when screening applicants.
    • Prior criminal convictions may not be considered until after a job offer is extended.

    Minimum wage - You can be certain the minimum wage changed somewhere near you at the state or city level.

    Worker classification – Last year California became one of the newest states to adopt a 3-factor ABC test for classification. Know the labor rules on how to classify workers as either vendors or employees, which will vary depending on your state.

    Board representation – Women are now required on boards of public companies in some states.

    Parental leave - Parents are more protected in several jurisdictions. We are seeing expanded parental leave policies and extra accommodations for lactating mothers who return to work.

    As you can see, it's a minefield! So you need to know the rules in your jurisdiction. Yes, it's a time-consuming pain, but noncompliance is risky and ultimately very expensive.

    Need some help? Don't hesitate to reach out to one of our HR Solutions team members.

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Jenn McCabe - Partner, Outsource HR - El Segundo CA | Armanino
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