Changes in Labor Law for 2023
The end of the year is upon us, with labor and employment law changes ahead for 2023. Many new laws and regulations that impact both employers and employees take effect January 1. Other labor issues are priorities that could result in new law passed later in the year. Preparing for these changes now means an easier transition to whatever the new year brings.
Wage and hour laws and minimum wage
While the federal minimum wage stays at $7.25 per hour, many states across the country have increased their own rates, ranging from Maine’s $13.80 per hour to Washington’s nationwide high of $15.74 per hour. Some states have set different minimum wages, depending on location and industry. Not all state-level minimum wage changes start January 1. Regardless, employers must be ready now to meet new requirements when they take effect.
President Biden pledged to raise the minimum salary threshold for executive, administrative, and professional employees to be considered exempt from earning overtime. That would expand overtime pay to additional workers. The details are not specific, but Secretary of Labor Marty Walsh is clear that he believes the current $35,586 threshold to be too low. Watch for proposed legislation in 2023.
New and amended employment laws at the state level
Many states have passed additional labor laws or amendments to current regulations. Be aware of any changes in your company’s state — some are significant. These state laws are examples of the impact ahead for employers. Note that the same issue can have a much different focus from state to state.
New York
New York is expanding its previously enacted Paid Family Leave. As of January 1, 2023, eligible employees can take Paid Family Leave to care for siblings with serious health issues. Biological siblings, adopted siblings, stepsiblings, and half-siblings are eligible — and the family member who requires care does not have to live in New York state.
Colorado
Employers that do business in Colorado must comply with Paid Medical and Family Leave (PFML) starting the first day of 2023. Eligible employees can receive up to 12 weeks of paid leave funded through payroll taxes split between employers and employees. Paid leave applies only after it is funded and not sooner than January 1, 2024.
California
The strictest labor laws in the United States will be even more so in 2023. The new law concerning salary information significantly impacts employers. The state’s Pay Transparency Law will now require an employer to provide the pay scale upon request of any job applicant or current employee. Companies with more than 14 employees must include the pay scale in every job posting, regardless of posting site.
Worker classification
The administration announced a new regulation that redefines the legal test for independent contractor status. Be aware of the six factors in the proposed rule, even though litigation is likely to delay the change. Your employment attorney will keep you informed about how and when it may affect your company.
The requirement to comply with labor law is not contingent on your awareness. Employers must understand every regulation and how to adhere to it. Staying prepared entails frequent consultations with your employment attorney, who will make sure that you stay compliant with minimum impact to your business. We are always happy to help.