Welcome to the latest edition of AlphaStaff's Monthly Compliance Updates!
We are pleased to provide you with a recap of national and state legal updates and highlight resources provided by some of AlphaStaff’s trusted legal partners to guide and help keep you in compliance.
Automatic 540-Day Extension of Certain Employment Authorization Document Renewals Will Expire for Foreign National Workers in October 2023
As highlighted in the Summer 2022 edition of the AlphaAdvisor, the U.S. Department of Homeland Security (DHS) passed a temporary final rule, increasing the automatic extension of employment authorization documents for certain foreign nationals from 180 days to 540 days. The DHS passed this temporary rule to prevent gaps in work authorizations due to the USCIS’ delays in processing work authorization renewal applications filed using USCIS Form I-765. This temporary rule is set to expire on October 26, 2023.
Employers should make impacted employees aware of this policy change. If possible, these employees should file their extension applications before October 26, 2023, to continue to qualify for the 540-day automatic extension. Failure to apply by the cutoff means their automatic extension reverts to the original 180-day limit. Failure to prepare could disrupt operations and leave foreign employees in a difficult situation.
Click here to read more from our trusted legal partner, Fisher Phillips.
DOL Proposes Significant Increases to "White-Collar" Salary Threshold
On August 30, 2023, the U.S. Department of Labor (DOL) unveiled a proposed rule that would significantly raise the minimum salary requirements for the "white-collar" exemptions under the Fair Labor Standards Act (FLSA). If approved, the salary threshold for exempt executive, administrative, and professional employees would rise by 55% from $35,568 to $55,068 annually. The threshold to determine eligibility for an exemption as a highly compensated employee will increase by 34%, from $107,432 to $143,988 annually. The DOL also proposes that the salary thresholds would be automatically updated every three years to correspond with current earning data. Finally, the proposed salary thresholds would apply to workers in the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands.
The proposed rule has not yet been published in the Federal Register. However, once published, public comment on the proposed rule will be accepted for 60 days after the publication date.
There is uncertainty about the timeline for the finalization of the proposed rule due to potential legal challenges and historical setbacks in previous attempts to revise the salary threshold. AlphaStaff will continue to monitor the legal developments regarding this proposed rule to keep you informed.
Employers should take this opportunity to review how these federal changes interact with state laws, as some states have higher salary requirements or other exemptions. Click this link to review the current salary thresholds for the applicable states.
Click here to read the Jackson Lewis article detailing the proposed new rule.
EEOC Files for Consent Decree Settlement in AI Discrimination Case
The Equal Employment Opportunity Commission (EEOC) is intensifying its scrutiny over employers' use of artificial intelligence (AI) in hiring and other employment decisions. Recently, the EEOC settled its first AI-related claim for $365,000 against a tutoring service that used age-based algorithms to screen out applicants over a certain age, thereby violating the Age Discrimination in Employment Act. This move is part of the EEOC’s broader Artificial Intelligence and Algorithmic Fairness Initiative. The agency has also released a Technical Assistance Document addressing employment selection procedures under Title VII of the Civil Rights Act of 1964, which was discussed in the August 2023 edition of the AlphaAdvisor.
The EEOC warns that while AI can streamline recruitment, it can also unlawfully screen out qualified candidates. These algorithmic decision-making tools can expose companies to significant compliance and litigation risks. Employers should exercise due diligence in implementing AI tools, ensuring they are compliant with federal civil rights laws.
To read more on this topic, click here for an article published by Jackson Lewis.
California Reaches Across State Lines to Invalidate Employee Non-Compete Agreements
California has further tightened its already strict laws on non-compete agreements with the signing of Senate Bill 699 (SB 699). This new legislation expands California's limitations on non-competes to contracts signed outside of the state, effectively nullifying out-of-state non-compete agreements for employees working in California.
Key aspects of this law include:
- Non-compete agreements are unenforceable in California, irrespective of where they were signed or where employment was maintained.
- Employers attempting to enforce such contracts could face civil violations.
- Employees, former employees, and even prospective employees can bring a private right of action to enforce this new law, including suing for injunctive relief, actual damages, and attorney fees.
There is little doubt that this landmark legislation sets the stage for legal battles between California-based companies and out-of-state employers. However, given the increased liabilities and new enforcement mechanisms, employers should act promptly to ensure compliance by reviewing any existing non-compete agreements in line with SB 699.
To read more on this topic, click here for an article from our trusted legal partner, Littler Mendelson.
California Civil Rights Council Modifies Regulations Pertaining to Background Checks
On July 24, 2023, California updated its Fair Chance Act, impacting employers with five or more employees. Effective October 1, 2023, the new regulations refine how employers can assess an applicant's criminal history during the hiring process. Specifically, employers must now make a "reasoned, evidence-based determination" in assessing an applicant's conviction history and provide a detailed written explanation of the disqualifying conviction and notice of right to respond before the decision becomes final. Furthermore, employers must allow an applicant to submit evidence of rehabilitation or mitigating circumstances around the conviction.
Employers are prohibited from refusing an applicant's additional evidence or asking for specific types of evidence. When reassessing the applicant, an employer can consider factors such as conduct during incarceration, employment history post-conviction, and community engagement before making the final hiring decision.
Employers with California employees should update their hiring protocol to ensure compliance with the new regulations.
Click here to read more from Jackson Lewis.
Colorado Amends the Equal Pay Work Act
As highlighted in the July 2023 edition of the AlphaAdvisor, Colorado recently passed the Ensure Equal Pay for Equal Work Act, which amends key provisions of the "Equal Pay for Equal Work Act" with the goal of clarifying employer obligations for announcing job opportunities and adds new compliance requirements.
Key Requirements of the Amended Law include:
- Employers are required to make reasonable efforts to inform all employees of each job opportunity, either by announcing or posting on the same calendar day or before making a hiring decision. Any employers physically located outside of Colorado with less than 15 employees working remotely in Colorado only need to provide notice of remote job opportunities through July 1, 2029.
- Employers must continue to provide good faith disclosure detailing the hourly or salary compensation range and a general description of the benefits and other potential compensation. However, the amended law adds that employers must include the date the application window is expected to close.
- Employers will need to provide additional disclosure to the employees with whom a selected candidate is intended to work regularly. This disclosure must include the candidate's name, former job title (if applicable), new job title, and description of how many employees may express interest in similar job opportunities in the future.
The Act also sets up a mediation process for violations and allows for back pay claims for aggrieved persons, not to exceed six years. The amended law is expected to take effect on January 1, 2024, and rules for enforcing the Act will be in place by July 1, 2024. Employers should begin reviewing and modifying existing processes to ensure compliance and keep an eye out for further guidelines before the effective date.
Please follow this link to the Jackson Lewis article for more details.
Illinois Enacts Pre-Tax Commuter Benefits Requirement
Effective January 1, 2024, the Illinois Transportation Benefits Program Act mandates certain employers in designated Illinois regions to offer a "pre-tax commuter benefit" to employees. This means that qualifying employees must be able to use pre-tax dollars to buy transit passes through payroll deductions. The Act is applicable to specific employer geographic locations within and around the City of Chicago, including numerous townships in several counties.
Covered employers are those that employ at least 50 "covered employees" in a "covered location." Additionally, an employee must average at least 35 work hours per week to be eligible for the benefit. For new hires, the benefit kicks in on the first full pay period after 120 days of employment.
Click here for more information and more detail on the definitions of "covered employee" and "covered location" from our legal partner, Jackson Lewis.
Illinois Passes New Pay Transparency Law That Will Require Pay Info in Job Postings
On August 11, 2023, Illinois Governor JB Pritzker signed several amendments to the Illinois Equal Pay Act that will become effective on January 1, 2025. Most significantly, the updated law mandates employers to include wage or salary ranges and a general description of benefits in job postings for positions that are either located in Illinois or report to an Illinois-based supervisor or work site. Although the new law does not require employers to publish job postings, employers are required to disclose pay scale and benefits information to applicants prior to any offer or discussion of compensation and at the applicant’s request. Additionally, employers must retain records of the pay scales and benefits for each position for a minimum of five years.
The penalty for non-compliance could be severe for a covered employer even if they engage with third parties for recruiting purposes. Specifically, the law extends liability to employers for any third-party recruiters who fail to comply with these new requirements. Failure to adhere to these rules could result in a $100 per day civil penalty for each violation.
Employers with a workforce in Illinois should take this time to review existing policies and develop the necessary policies to ensure compliance with the amended law.
To read more on this topic, click here for an article published by Fisher Phillips.
Illinois Requires Paid Organ Donor Leave
Effective September 1, 2023, Illinois’ Employee Blood Donation Leave Act expands the scope of the law by including organ donation as a covered leave reason. Under the law, employers with 51 or more employees must provide paid leave to a full-time employee that has been employed for a period of six months or more. Any employee that qualifies for this leave is entitled to up to ten days of leave in any 12-month period.
Please click here for details.
Illinois Implements New Notice Distribution Requirements for Remote Workers
Starting January 1, 2024, Illinois is implementing new electronic notice distribution requirements for employers who have employees who work remotely or do not regularly report to a physical workplace. The new law (HB 3733, Public Act No. 103-0201) mandates that these employers must distribute work-related notices electronically. This can be done either via email or through a conspicuous posting on the employer's website or intranet site that is commonly used for communicating work-related information.
The amendment impacts notices required by several Illinois employment laws, including:
- The Illinois Minimum Wage Law
- The Illinois Equal Pay Act of 2003
- The Illinois Wage Payment and Collection Act
- The Illinois Child Labor Law
- The Illinois Day and Temporary Labor Services Act (IDTLSA)
For employers dealing with day and temporary laborers, all notices (including the IDTLSA-required Employment Notice and Poster) must be made available in "English, and any other language generally understood in the locale."
AlphaStaff's vendor partner, Poster Guard, will assist any impacted client subscriber to comply with this poster requirement. Please contact your HRAM if you would like more information on the services offered by Poster Guard.
For more information on the notice requirement, click here for an article by Jackson Lewis.
Illinois Becomes the First State to Enact Protections for Freelance Workers
On August 4, 2023, Illinois Governor JB Pritzker enacted the Freelance Worker Protection Act (FWPA), designed to offer robust safeguards to freelance workers in the state. The new law is scheduled to go into effect on July 1, 2024.
Under the FWPA, employers must comply with the following three requirements when hiring and retaining freelance workers:
- A written agreement is required when retaining a freelance worker for services or products valued at $500 or more, a copy of which must be kept for at least two years.
- Prompt payment to the freelance worker must be made within 30 days of the project completion date or delivery of the final product.
- Employers are prohibited from engaging in any discriminatory, retaliatory, or harassing behavior toward contracted freelance workers.
The FWPA specifies that freelance workers are individuals who undertake contractual work for an Illinois-based entity but excludes construction workers and those in traditional employer-employee relationships.
Freelancers can file complaints with the Illinois Department of Labor or directly in court on their own behalf or on behalf of a class of similarly situated freelance workers.
While Illinois is the pioneer, it is important to note that other states like New York, Kansas, and Missouri are considering similar laws.
To read more about the new law, follow this link to an article from Littler Mendelson.
New York State Pay Transparency Obligations Take Effect September 17
The April 2023 edition of the AlphaAdvisor highlighted the passage of the New York State Pay Transparency Law that will become effective September 17, 2023. Under this law, covered employers are required to disclose the minimum and maximum annual salary or hourly range in any job, promotion, or transfer advertisement. This expands on an existing New York City law that has been in effect since November 1, 2022. This state law adds another layer to the City’s law by requiring the inclusion of an applicable job description, if available. Employers should immediately review their existing job advertisements and make the necessary updates to comply with the new state law.
Please follow this link to the Jackson Lewis article discussing the transparency law.
Oregon Employees Are Now Eligible for Paid Leave Benefits
Employers and employees in Oregon started contributing to fund the Oregon paid leave program at the beginning of 2023. On September 3, 2023, covered employees became eligible to take leave under Oregon's Paid Family Medical Leave Act. An employee is eligible if they have earned at least $1,000 in the prior calendar year. Under the program, they are entitled to up to 12 weeks of paid leave. Benefits are managed by the Paid Leave Oregon program, with weekly wage benefits ranging from $63.48 to $1,523.63 for 2023.
As highlighted in the original AlphaStaff communication sent on December 19, 2022, employers must provide written notice about the law to all employees, including those who work remotely. Model notices in several languages can be found here.
Oregon employers should develop a leave policy that incorporates various types of leave, like the Oregon Family Leave Act, Family Medical Leave Act, and Oregon Sick Leave. Additionally, employers are permitted to allow employees to use other paid benefits to supplement the Paid Leave Oregon program. Employers should be aware that the new law doesn't replace but can run alongside existing leave entitlements. Special guidance is also available for employers with out-of-state workers.
For a more detailed explanation of this law, please click here to read the Jackson Lewis article.