Five Compliance Issues Employers Need to Know for 2020

With 2020 approaching quickly, we want to make sure you keep these compliance issues on your radar.

Overtime threshold changes under the Fair Labor Standards Act (FLSA)
Effective January 1, 2020, the minimum salary level for exempt employees increases from $455 per week to $684 per week ($35,568 per year). For highly compensated employees, as defined by the FLSA, the minimum annual salary for exemption from overtime increases from $100,000 to $107,432. Employers that have current, salaried, exempt employees who make more than $23,660 per year but less than $35,568 per year will become non-exempt, unless the salary is raised. Keep in mind that some states have higher minimum thresholds, so be sure to familiarize yourself with state standards to avoid fines and possible litigation.

Paid sick leave and family and medical leave laws
Eleven states and multiple localities have laws that grant employees paid sick leave and paid family and medical leave. These laws range from paid leave to be used for any reason the employee chooses, to those with more specific guidelines for sick leave and safe time (for domestic abuse issues). Review current paid time off policies to ensure compliance with local law for every location in which you have employees.

Salary history bans
More states, counties, and cities are enacting bans that prohibit employers from requiring an applicant’s wage history as part of the application process and from retaliating against those who refuse. While specific prohibitions vary according to the specific law, the trend is to limit inquiries on salary history from employers. Be sure to review your applications, interview protocols, recruiter guidelines, and reference check process to ensure that you are complying with applicable laws and ordinances. You can check the status of your locality here or here.

Medical and recreational marijuana
Employers face new challenges as more states legalize marijuana for medical or recreational use. Illinois will become the 11th state, effective January 1,2020, that allows both. Other states have introduced bills that will be addressed in the coming year. Some of these states prohibit pre-employment testing for marijuana. However, since the substance remains illegal at the federal level, employers subject to Department of Transportation regulations must continue to follow them. While closely monitoring legal developments, employers should review substance abuse policies, focusing on identifying and prohibiting impairment on the job, whatever the cause, and what action to take in response.

Independent contractor status
Classifying a worker as an independent contractor rather than an employee is a complicated issue, with a variety of different, ever-evolving state and federal tests. The National Labor Relations Board (NLRB) has been leaning toward employer-friendly tests, but states like California are enacting law that restricts an employer’s ability to classify an individual as an independent contractor. Employers must take care to apply all appropriate tests before classifying a worker as an independent contractor; in some cases, the best course is to change the status of independent contractors to employees.

Compliance issues tend to be difficult to keep up with and navigate, so this is a good time to bring in your employment law attorney for a review of your HR policies. As always, we are happy to help.


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