States and municipalities across the country ring in the new year by implementing new laws that employers must be aware of—and 2020 is no different. Effective January 1, 2020, there will be over 2 dozen new laws going into effect across 10 states and 2 laws that will impact the entire nation.
The map below highlights which states will be impacted and what the changes will entail. More information about these changes is highlighted below the map. But wait, you say—why aren’t minimum wages included in this map? There were so many minimum wage updates going into effect on January 1 that we had to create a completely different map, stay tuned for tomorrow’s post!
Defined Contribution Health Plans—A rule finalized in 2019 (84 Fed. Reg. 28888) partially reverses the Affordable Care Act (ACA) prohibition and allows health reimbursement arrangements (HRAs) to be integrated with individual coverage under certain circumstances. The rule also classifies certain other HRAs as “excepted benefits” exempt from many health plan requirements. The changes take effect for plan years beginning on or after January 1, 2020.
Funds in the new “individual coverage HRA” (ICHRA) can reimburse premiums for individual health insurance, whether offered on or off an ACA exchange, as well as Medicare coverage. A separate “excepted benefit HRA” (EBHRA) can help cover copayments and deductibles, as well as dental, vision, and short-term coverage.
For any portion of the individual health insurance premium not covered by an ICHRA, employers may offer pretax salary reduction through a cafeteria plan. This applies only to off-exchange coverage because the cafeteria plan rules prohibit the use of funds for exchange coverage.
An offer of an ICHRA will count as an offer of coverage under the ACA employer mandate, though to avoid penalties, an applicable large employer also must fund the ICHRA sufficiently to meet affordability requirements. The final rule amends the ACA premium tax credit regulations to specify how the affordability analysis applies in this context.
Employees must enroll in individual health insurance (or Medicare) for each month the employees (or family members) are covered by the ICHRA. This cannot be short-term, limited-duration insurance or coverage consisting solely of dental, vision, or similar “excepted benefits.”
An ICHRA must be offered on the same terms to all employees within a class, except that the amounts offered may be increased for older workers and for workers with more dependents. An employer cannot offer an ICHRA to any employee to whom it offers a traditional group health plan. However, the employer could decide to offer an ICHRA to certain classes of employees and a traditional group health plan (or no coverage) to other classes of employees.
An EBHRA must be offered in conjunction with a traditional group health plan, although the employee is not required to enroll in the traditional plan. Employers may contribute up to $1,800 per year to an EBHRA, and amounts may be rolled over year to year.
Overtime/exempt personnel—The Department of Labor’s (DOL) final overtime rule, effective January 1, 2020, increases the current minimum salary threshold for overtime exemption. The minimum salary level for overtime exemption is $684 a week ($35,568 a year). That’s up from the current law—in force since 2004—which requires employees to earn at least $455 a week ($23,660 a year). Workers making less than the threshold earn 1 ½ times their regular rate of pay for all hours over 40 during a workweek.
Discrimination—The California Fair Employment and Housing Act (FEHA) adds a new definition to the term “race.” Effective January 1, 2020, “race” includes traits historically associated with race, including hair texture and protective hairstyles. The term “protective hairstyles” includes hairstyles such as braids, locks, and twists.
Enforcement of California fair employment laws—Effective January 1, 2020, the statute of limitations for filing a claim of discrimination, harassment, or retaliation increases from 1 year to 3 years (CA Gov. Code Sec. 12960).
Maternity and pregnancy—State law gives a mother the right to breastfeed her child in any location where the mother and the child are otherwise authorized to be present (CA Civil Code Sec. 43.3). Effective January 1, 2020, a new law amends the requirements for lactation accommodation in the workplace.
Privacy—The California Consumer Privacy Act (CCPA) requires employers to notify employees and applicants about personal information the employer collects and the purposes for which the information will be used. The enforcement deadline is July 1, 2020. Proposed regulations have been issued but are not yet finalized.
Sexual harassment—*Deadline change* Under a new state law, the deadline to complete harassment prevention training has been changed from January 1, 2020, to January 1, 2021.
Employee exemption—Effective January 1, 2020, the federal salary threshold will be higher than the Connecticut salary threshold, so employers will have to raise the salaries of any employees earning less than the federal salary threshold in order to classify them as exempt.
Texting—Officers can begin writing citations for texting while driving, which carry fines of about $30, plus court costs and fees, as well as three points on the driver’s record for a first offense. Employers are advised to adopt policies banning texting while driving; avoid creating any incentives that encourage or condone texting; and during any training, discuss the policies and the dangers of distracted driving.
Alcohol and drugs/hiring—Illinois recently became one of the newest states to legalize recreational marijuana. Effective January 1, 2020, state law legalizes recreational marijuana and allows a person who is at least 21 years old to possess, consume, use, purchase, obtain, or transport marijuana in an amount that does not exceed the law’s possession limit (HB 1438 Sec. 10-5, June 24, 2019).
Employers may adopt reasonable drug-free workplace policies, as well as policies on drug testing, smoking, consumption, storage, or use of marijuana in the workplace or while on call, as long as the policies are enforced in a nondiscriminatory manner (Sec. 10-50). Employers may prohibit employees from being under the influence of marijuana while in the workplace, performing job duties, or on call and may take disciplinary action against an employee, including termination, for violating employment policies. The state’s recreational marijuana law was amended on December 4, 2019, to prohibit lawsuits against an employer that takes an adverse employment action based on subjecting an employee or applicant to reasonable drug and alcohol testing; reasonable and nondiscriminatory random drug testing; and discipline, termination, or withdrawal of a job offer due to a failed drug test.
Employment agreements—Effective January 1, 2020, no contract, agreement, waiver, or other document may prohibit or restrict an applicant, an employee, or a former employee from reporting allegations of unlawful conduct to federal, state, or local officials. In an agreement that is a unilateral condition of employment or continued employment, any provision that has the purpose or effect of preventing an applicant or employee from making truthful statements or disclosures about alleged unlawful employment practices is void. In addition, an agreement cannot require an employee to waive, arbitrate, or diminish a future claim related to an unlawful employment practice.
Enforcement of the Illinois Department of Human Rights (IDHR)—The IDHR and the Human Rights Commission enforce the Human Rights Act. Effective January 1, 2020, when an employee has filed a charge with the IDHR and has started a lawsuit in a federal or state court seeking relief on some or all of the same issues that are the basis of the charge, either party may request that the IDHR administratively dismiss the charge or portions of it (775 IL Comp. Stat. 5/7-109.1). Within 10 days of receipt of the court complaint, the department must issue a notice of administrative dismissal and provide a right-to-sue notice to the complainant.
Harassment—Effective January 1, 2020, the law defines “harassment” as any unwelcome conduct based on an individual’s actual or perceived race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, unfavorable discharge from military service, or citizenship status when the conduct has the purpose or effect of:
- Substantially interfering with the individual’s work performance; or
- Creating an intimidating, hostile, or offensive working environment.
Under the law, the term “working environment” is not limited to a physical location to which an employee is assigned to perform his or her duties.
Privacy/hiring—The Artificial Intelligence Video Interview Act (2019 Ill. Laws 260) takes effect January 1, 2020. It imposes notice, consent, and confidentiality requirements on employers that use artificial intelligence (AI) in the job interview process.
Notice of a data breach—Beginning January 1, 2020, if a breach requires notification of 500 or more Illinois residents, the data collector must notify the attorney general. The notice must be made as expediently as possible and without unreasonable delay and no later than when the individuals are notified (Pub. Act 101-0343).
Sexual harassment—Effective January 1, 2020, employers are responsible if a supervisor or manager harasses a nonemployee in the workplace. An employer is responsible for the harassment of nonemployees by its nonmanagerial and nonsupervisory employees only if the employer becomes aware of the conduct and fails to take reasonable corrective measures.
A “nonemployee” is a person who is not otherwise an employee and is directly performing services for the employer under a contract with the employer. The term includes contractors and consultants (IL Comp. Stat. Ch. 775 Sec. 5/2-102(D-5)).
In any proceeding in which a member of a union has accused another member of sexual harassment, the accuser and the accused may not be represented in the proceeding by the same union representative. The union must designate separate union representatives to represent the parties.
Every restaurant and bar in the state must adopt a written sexual harassment policy and provide it to all employees within the first calendar week of employment.
Additionally, every employer with employees working in the state must provide sexual harassment prevention training annually to its employees (775 IL Comp. Stat. 5/2-109). The law requires the IDHR to produce a model sexual harassment prevention training program. Employers must use the model training or establish their own training that meets or exceeds the standards under the law.
Salary history—A law amending the Illinois Equal Pay Act to prohibit employers from making preemployment inquiries about a job candidate’s salary history is set to take effect in January. The law applies to private employers with four or more employees as well as state agencies and school districts. It prohibits Illinois employers from screening job applicants based on their wage or salary history. In particular, it prohibits requiring an applicant to disclose previous wages or salary and also bars seeking that information, including benefits or other compensation, from any current or former employer.
Workers’ compensation—Effective January 1, 2020, for total incapacity injuries occurring on or after January 1, 2020, benefits will be subject to a cost-of-living adjustment after 5 years (2019 ME Laws 344). For partial incapacity injuries occurring before January 1, 2020, benefits for permanent partial incapacity are available for up to 10 years. After that date, such benefits will be available for up to 12 years.
Before January 1, 2020, an injured employee must give the employer written notice of the injury within 30 days. After that date, employees will have 60 days to do so. This deadline may be excused if there was good cause for the delay in notification. No notice is required if the employer is aware of the injury. Notice of a work-related death is due within 3 months. A claim for benefits must be made within 2 years of the injury or within 1 year of death. In the case of recurrence, claims for a resumption of benefits must be made within 2 years of the last compensation payment.
Alcohol and drugs/hiring—Nevada recently became the newest state to legalize recreational marijuana. Effective January 1, 2020, state law prohibits employers from refusing to hire a job applicant because he or she submitted to a screening test and the results indicate the presence of marijuana (AB 132, June 5, 2019).
Leave of absence/sick leave—Effective January 1, 2020, Nevada law requires covered employers to provide earned paid leave, which employees may use for any reason, including those for which sick leave is typically used (2019 SB 312).
Equal pay—Effective January 1, 2020, employers are prohibited from screening a job applicant based on his or her salary history, including wages, salaries, or benefits (NJ Rev. Stat. Sec. 10:5-12(r)(2)). Employers may not require an applicant’s salary history to satisfy minimum or maximum criteria.
If an applicant voluntarily, without employer prompting or coercion, provides the employer with his or her salary history, the employer may consider the information when determining salary, benefits, and other compensation for the applicant and may verify the applicant’s salary history. However, an employer may not consider an applicant’s refusal to volunteer information in any employment decisions. An employer may ask an applicant to provide it with written authorization to confirm the applicant’s salary history after an offer of employment that includes an explanation of the overall compensation package has been made.
Paid leave—Another benefit increase is set to take effect January 1, 2020, under New York’s Paid Family Leave (PFL) Benefit Law. The law, enacted in 2016, is being phased in over a number of years. In 2020, eligible employees will be entitled to up to 10 weeks of leave at 60% of their average weekly wage (AWW). The AWW in 2020 will be capped at $1,401.17, making the maximum PFL benefit $840.70 per week.
Unemployment compensation—Beginning January 1, 2020, the Farmworkers Fair Labor Practices Act goes into effect. Regarding unemployment compensation, all agricultural employers are covered regardless of size.
Withholding—Effective January 1, 2020, the North Carolina Department of Revenue will require income tax withholding of 4% from payments made to nonresident contractors and certain nonemployee compensation payments where a taxpayer identification number (TIN) or an individual taxpayer identification number (ITIN) is not available.
Maternity and pregnancy—Effective January 1, 2020, Oregon’s Employer Accommodation for Pregnancy Act expands the Oregon Fair Employment Practices Act to require employers with six or more employees to also provide reasonable accommodations for employees’ and applicants’ known limitations related to pregnancy, childbirth, and related conditions. Failure to make reasonable accommodations will be an unlawful employment practice.
Additionally, the Employer Accommodations for Pregnancy Act requires covered employers to provide reasonable accommodations for pregnancy, childbirth, and related conditions (2019 House Bill 2341; ORS Ch. 659A et seq.).
Privacy— The Oregon Consumer Information Protection Act imposes a number of obligations on employers to help protect personal and confidential information belonging to Oregon residents (OR Rev. Stat. Sec. 646A.600 et seq.). This law was amended to broaden the set of personal information covered and impose new obligations on vendors.
Healthcare insurance—Health plans issued or renewed on or after January 1, 2020, must cover telehealth services on the same basis as the plan covers the service or procedure in an in-person setting.
Privacy—Businesses operating in Texas that own or license computerized data that include sensitive personal information must disclose any breach of system security after discovering or receiving notification of the breach to any Texas resident whose sensitive personal information was, or is reasonably believed to have been, acquired by an unauthorized person. Beginning January 1, 2020, if a breach requires notification of 250 or more Texas residents, businesses must notify the attorney general within 60 days after determining that the breach occurred (2019 HB 4390).
Employee exemptions—Effective January 1, 2020, Washington employees will have to receive at least the required federal salary threshold to be classified as exempt, and the salary threshold will continue to increase until 2028.
Employment agreements—Effective January 1, 2020, Washington sets specific limitations and requirements upon employers wishing to enter into and enforce noncompetition agreements in the employment context (Engrossed Substitute House Bill 1450 (HB 1450)). The new law applies to any noncompetition agreement entered into with employees and independent contractors after the effective date, but it also includes provisions for retroactivity.
The act defines “noncompetition agreements” as every written or oral agreement restraining an employee or independent contractor from engaging in a lawful profession, trade, or business after an employment relationship ends.
The new law applies both prospectively and retroactively. Specifically, it applies to all proceedings commenced on or after January 1, 2020, but also states “regardless of when the cause of action arose.” This language indicates that the law is intended to apply to noncompetition agreements entered into before January 1, 2020, if an employer files a lawsuit to enforce them after the effective date.
Leave of absence—Beginning January 1, 2020, eligible employees in Washington state will be entitled to up to 18 weeks of paid family and medical leave per year (2017 SB 5975; Wa. Rev. Code Tit. 50A).