FEDERAL UPDATES

EEO-1 Deadline Extension:  Shortly before the anticipated “mid-July” opening of the EEO-1 reporting portal, the EEOC quietly posted a new timeline on its website.  The portal will now open sometime in “Fall 2023”.  In past years the portal has remained open for 4-6 weeks before the deadline for compliance.

The good news is that the snapshot period remains the same (any pay period in Q4 of the prior calendar year), so any data already gathered will still be valid when the portal eventually opens.  While we wait, this is a great time to review and update voluntary self-identification forms (especially with respect to non-binary gender options), as well as EEOC guidance for reporting data for employees declining self-identification.  

EEO-1 reporting is generally required for private employers with 100+ employees, and federal contractors with 50+ employees, and requires filing a report breaking down headcount by gender, race and ethnicity in specific locations and job categories.  According to the EEOC, the purpose of collecting the data is to support enforcement actions, facilitate research on employment patterns, and encourage employers to focus on potential discrimination patterns and opportunities to promote diversity.

DOL Exempt Threshold:  Although it has been delayed several times over the past 2 years, the Department of Labor just submitted a new overtime rule to OMB for final review.  This means that DOL is likely to officially issue a proposed rule within the next 100 days.  Once the proposed rule is published, the public will have 30 days to comment before it moves to a “final” rule, and once the final rule is published it would take effect after 60 days (although it is likely that litigation could delay it further).  Current predictions are that that the minimum salary for exempt status will be raised from $35,568 to somewhere between $46,800 – $52,000 per year.  It could also tie future increases to inflation, and make changes to the duties tests. 

FMLA Forms:  The Department of Labor officially announced that employers can continue using the existing model FMLA forms until further notice, even though they technically expired June 30.  Employers can also use their own forms as long as they provide the same basic information and require only the same basic certification information.  The DOL also reminded employers that they must accept a “complete and sufficient” certification regardless of the format, even if it is not on the DOL’s or company’s standard form, and that in some cases this may also include medical documentation submitted on the letterhead of a health care provider.

SCOTUS/Affirmative Action:  The recent Supreme Court ruling against affirmative action technically only applies to race-based admission decisions in higher education, but many believe that some aspects of the decision will soon trickle down to workplace diversity, equity, and inclusion (DEI) or similar programs.  This is mostly expected to result in less diversity in applicant pools, and more legal challenges to DEI programs and hiring practices (especially in states hostile to DEI initiatives such as Texas and Florida).  It’s important to note that the decision does not affect federal contractors – they still have the same affirmative action/AAP development requirements.  All employers, including federal contractors, are and have always been prohibited from using quotas or preferences.  Given the new Supreme Court framework, employers should review their DEI programs and processes to ensure that their efforts focus on promoting diversity through outreach, education, or other non-discriminatory methods rather than implementing preferences or “plus factors”, or allowing diversity “goals” to effectively spill over into quotas or hiring preferences.  All hiring, pay, promotion, and other decisions should be based on business-related criteria and be well-documented to avoid legal and EEOC issues.

Federal Contractors (TikTok Ban):  The Department of Defense, GSA, and NASA have issued a new rule prohibiting the use of TikTok or other applications developed by Chinese-owned ByteDance Limited on federal contractor devices or any information technology owned or managed by the government or its contractors.  This includes all technology used by a federal contractor or subcontractor in connection with a government contract, including employee cell phones if they’re used for work.  Contractors are required to include this clause in all subcontracts.  These employers should remove TikTok from all work devices, update their policies to bar the use of TikTok and arrange to block access to TikTok on all company and employee devices.

STATE/LOCAL UPDATES

California

Covid Liability – Family Members:  In a welcome decision for employers, the CA Supreme Court unanimously held that an employer was not liable for an employee spreading Covid to his spouse even though the company failed to follow proper Covid safety protocols.  While acknowledging that there may have been a causal relationship between the lack of safety precautions at work and the employee’s spouse contracting Covid, the court relied on public policy to deny liability.  It found that the burden on employers, society, and the judicial system was too great to open the door to this type of tort claim.

Independent Contractors/Freelancers (Los Angeles):  The Freelance Worker Protection Ordinance passed by the City of Los Angeles took effect July 1, 2023.  It requires a written agreement for many independent contractors and freelance workers who work in the city and are paid $600+ in any calendar year and covers both for-profit and nonprofit businesses.  The agreement must be in writing and must include (i) the name, address, phone number, and e-mail (if available) of the hiring entity and the worker, (ii)  an itemized description of all services to be provided, the value of those services, and the rate and method of compensation; and (iii) the date by which the hiring entity must pay (or the manner by which such date will be determined).  The hiring entity then must provide full payment on or before the date specified.  Records must be retained for at least four years.  Workers can file a complaint with the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works, and can also bring a civil action for violations that may result in damages of (i) $250 if the worker requests and the hiring entity refused to provide a written agreement, (ii) two times the amount due if the hiring entity fails to pay for the services in a timely manner, and (iii) the greater of the value of the contract or the work performed.  They may also be entitled to attorneys’ fees and costs.

Maine (Paid Family and Medical Leave):  Maine joined 13 other states and Washington DC by passing a new paid family and medical leave program that will become effective May 1, 2026.  Employees will be entitled to 12 weeks of paid leave per year for baby bonding or their own medical condition, or for that of a broadly defined “family member” (a “significant personal bond that is or is like a family relationship regardless of biological or legal relationship”).  Unlike FMLA, there are no hours worked or length of service requirements, but there is a minimal wage requirement – employees must have earned at least $6,216 in the prior year to be eligible.  It will be funded by a 1% payroll tax beginning January 1, 2025, split between the employer and employee, although employers with fewer than 15 employees are exempt from their portion of the tax. We expect the state to issue additional regulations and guidelines prior to the act becoming effective.

Nevada:  The state legislature passed a few employment-related laws this year, including:

Leave for Sexual Assault Victims (AB 163):  Effective January 1, 2024, the Nevada leave statute providing up to 160 hours of job-protected leave for domestic violence victims will be extended to employees who are sexual assault victims, or whose qualifying family/household members are victims of sexual assault. 

Employee Misclassification (SB 145):  Effective July 1, 2023, Nevada requires state agencies to share information related to suspected or actual employee misclassification, which will likely result in additional scrutiny and audits across agencies.  Penalties also increased slightly, and the “Task Force on Employee Misclassification” was disbanded.

Wage Payments – Temporary Layoffs (SB 147). Effective July 1, 2023, employees placed on “nonworking” status due to a temporary layoff or reduction in force must be paid immediately, and penalties are assessed if not paid within 3 days.  This is already required for employees who are involuntarily terminated.

Minimum Wage:  Nevada’s minimum wage increased on July 1 to $10.25 per hour if the employee is offered qualifying health benefits, and $11.25 per hour if not.  This also increased the daily overtime rate for non-exempt employees, requiring employers to pay: 

• 1 ½ times the employee’s regular rate of pay for an employee who makes less than 1 ½ times their minimum wage rate ($15.375 or $16.875) and works more than 40 hours in a workweek or more than 8 hours in a workday.

• 1 ½ times the employee’s regular rate of pay for an employee who makes at least 1 ½ times their minimum wage rate ($15.375 or $16.875) and works more than 40 hours in a workweek.

Note that next July 1st the two-tier system will be eliminated, and the minimum wage for all nonexempt employees will be $12.00 per hour.

New York (Noncompetes):  In June, the NY legislature passed one of the toughest bans on non-compete agreements in the nation.  It would void traditional non-compete agreements (although it doesn’t appear to apply retroactively) with no exceptions for highly compensated executives, the sale of a business, or equity partners, and would cover both employees and independent contractors.  The ban would not apply to non-solicitation provisions or confidentiality agreements applicable to legitimate proprietary business information.  Since its passage multiple legal and industry organizations have been reaching out to the Governor’s office to request changes to the bill, and the prediction is that the Governor will either request a “chapter amendment” or veto the bill in favor of seeking some additional compromises similar to those passed in other states, such as adding a compensation threshold, an exception for the sale of a business, or carveouts for certain industries or job duties.  Many also believe that the bill as written is “confusing and redundant in parts”, so additional clarifications may also be on the table.  The Governor has through December 31 to “call up” the bill for final action, or to work with the legislature to negotiate a “chapter amendment”.  If the legislature elects to deliver it as-is, predictions currently lean toward a veto. 

If you’d like to speak to an HR expert about your business, connect with us.  

Asure Software provides this information for general information purposes only.  We are not attorneys, and the information in this update should not be relied upon or regarded as legal advice.  This information may not be accurate or complete as it relates to a particular company or situation, and does not reflect all developments or laws in all jurisdictions.