FEDERAL UPDATES

EEOC Enforcement Priorities.  The Acting Chair of the EEOC identified four areas that will be the focus of its enforcement activities to “prevent and remedy” systemic discrimination in the workplace:

• unlawful race discrimination in DEI programs, policies, and practices
• unlawful national origin discrimination involving preferences for foreign workers
• defending the immutable binary nature of biological sex and women’s rights to single – sex spaces at work, and
• protecting workers from religious bias and harassment, including anti-Semitism and anti-Christian bias, as well as defending the right to religious accommodations at work.

The EEOC is expected to rely on whistleblowers, EEO-1 reports, cases regarding religious exemptions (especially based on Covid or flu vaccine mandates), and shared data with other agencies (including past AAP reports).

Ames v. Ohio Department of Youth Services. This Supreme Court case is based on a heterosexual woman who claimed “reverse discrimination” when she was denied a promotion that went to a lesbian woman, and was then demoted and her position filled by a gay man. Lower courts required that, as part of a majority group, she provide additional evidence (“background circumstances”) showing discrimination. The Supreme Court disagreed, stating that “Title VII’s disparate-treatment provision draws no distinctions between majority-group plaintiffs and minority-group plaintiffs.”  This is widely expected to open the for more “reverse discrimination” lawsuits and is a warning to employers to ensure that they have strong, documented business-related reasons for any adverse employment action regardless of whether the employee is part of a protected class.

Strife v Aldine Independent School District (5^th Circuit). The 5^th Circuit recently held that an unreasonable delay (in this case 6 months) in granting an ADA accommodation reflected a lack of good faith in the ADA process and supported a failure to accommodate claim even though the employee was able to continue working throughout the process and did not suffer any tangible adverse employment action. Circuit courts are split on whether some harm is required to pursue a failure to accommodate claim, but the trend appears to be moving toward allowing these claims to stand on their own. The EEOC agrees, arguing that an unnecessary delay can be a violation of ADA even without an adverse employment action.  The US Supreme Court may eventually weigh in, but for now employers are advised to address ADA claims quickly, proactively engage in a documented interactive process in good faith, and avoid causing delays by requiring unnecessary medical exams or excessive paperwork.

STATE/LOCAL UPDATES

Alabama – Overtime Taxes.  The temporary tax exemption for overtime wages will expire June 30, 2025.

Alaska – Paid Sick Leave Notices (eff 7/1/25). Paid sick leave for all employers is quickly approaching and requires written notice to employees by July 31, 2025 (and when employment begins for new hires). While we hoped the state would provide a sample notice it does not intend to do so, other than to say that the wage and hour poster will not suffice. The notice must include the following information:

• Beginning July 1, 2025 employees are entitled to paid sick leave;
• The amount of paid sick leave;
• The terms of use guaranteed by law; and
• Retaliation against employees who request or use paid sick leave is prohibited.

Employers should also be aware of the full carryover requirement, which means that if they combine paid sick leave with an existing PTO policy they may be required to pay out the entire amount – including sick leave that has been carried over from year to year – at termination.  For this reason it may be beneficial to keep paid sick leave banks separate from vacation.

Although legislation was introduced to exempt small employers with fewer than 50 employees and seasonal workers, it did not pass this year so will not be considered until the 2026 legislative session.

Colorado – FAMLI Leave.  Beginning 1/1/26 employees with a child receiving inpatient care in a neonatal intensive care unit will be entitled to take up to an additional 12 weeks of FAMLI leave while their child is receiving care in the NICU.

Illinois (Chicago).  Effective July 1, 2025:

Fair Workweek Threshold.  The wage threshold for employees subject to the Chicago Fair Workweek Ordinance (building services, healthcare, hotels, manufacturing, restaurants, retail and warehouse services) will increase to $32.60/hour for hourly employees and $62,561.90 for salaried employees.

Minimum Wage. The new minimum wage will be $16.60 per hour for standard employees, and $12.62 for tipped workers.

Chicago Paid Leave. The phase in period for Medium Employers (51-100 employees) will expire, meaning that like Large Employers they will be required to pay out up to 56 hours of accrued and unused paid leave at termination of employment.

Posters and Notices.  Employers should ensure that the updated labor law poster is posted by July 1, and that they distribute the poster to covered employees by July 30.  The poster should also be included in onboarding materials and provided to new hires with their first paycheck.

Minnesota – Meal and Rest Breaks.  SF 17 will amend the state’s meal and rest break requirements effective 1/1/26. Currently, employers are required to provide “adequate” time to use the nearest convenient restroom every 4 hours. SF 17 will require a rest break of at least 15 minutes or enough time to utilize the nearest convenient restroom (whichever is longer) every 4 hours.

In addition, employers are currently required to permit employees working eight or more consecutive hours “sufficient time to eat a meal”. SF 17 will require employers to allow employees working six or more consecutive hours a meal break of at least 30 minutes.

The new law also provides additional remedies, including pay for time that should have been allowed in addition to liquidated damages. The Minnesota Dept. of Labor and Industry is expected to provide additional information prior to the effective date.

Montana – Volunteer Emergency Responders.  Effective 10/1/25 Montana employers will be prohibited from terminating employees because they provide volunteer emergency services or have joined a volunteer emergency unit.

Employees must provide written notice to the employer of their status as a volunteer emergency services provider as follows:

• Current employee volunteers: Within 30 days of October 31, 2025;
• Current employees who volunteer after October 1, 2025: Within 30 days of volunteering; and
• New employee volunteers: Within 30 days of hire.

While an employer cannot terminate an employee who is absent or late to work because the employee is providing volunteer services during an emergency, it does have discretion as to whether the employee may leave work to respond to an emergency. The employer may establish that any volunteer emergency response time be unpaid for nonexempt workers.

Nebraska – Paid Sick Leave.  The Governor signed an amendment modifying the voter-enacted Nebraska Healthy Families and Workplace Act prior to its 10/1/25 effective date.  Changes include:

• Employers with 10 or fewer employees are now exempt. The “small employer” designation will now apply to employers with 11-19 employees only.
• Owner-operators, independent contractors, individuals employed in agricultural employment of a seasonal or other temporary nature, and individuals under 16 years of age are now excluded from coverage.
• Accruals for new hires may be delayed until completion of 80 hours of consecutive employment in the state.
• Paid sick time granted prior to October 1 may be credited against frontloaded amounts in October, or the annual accrual cap.
• Employers can set reasonable procedures for leave requests rather than allowing oral requests.
• Employers are not required to pay out unused sick leave at termination of employment (unless combined with PTO).

The Department of Labor has also updated the FAQs to exclude transient employees, indicating that for purposes of counting the number of employees only those individuals who work at least 80 hours of consecutive employment in the State will be counted when determining business size.

New York City – The New York City Department of Consumer and Worker Protection issued amended ESSTA rules to add the state prenatal leave requirement. The changes are effective July 2, 2025, and include an obligation to distribute updated policies to employees within 14 days of the effective date. The City provided an updated notice for distribution and posting:  Notice of Employee Rights: Safe and Sick Leave.

Employers must also include the amount of paid prenatal leave used and remaining on pay stubs or other documentation provided to the employee in each pay period that the employee uses paid prenatal leave.

Oregon

Paid Sick Leave – Donating Blood.  Effective 1/1/26 Oregon employees will be permitted to use paid sick leave for blood donations made in connection with a voluntary program that is approved or accredited by the American Association of Blood Banks or the American Red Cross.

Lactation Accommodation – Agriculture.  HB 2541 confirms that agricultural workers have the right to express breast milk during work hours.

Payroll Documentation.  SB 906 (eff 1/1/26) will require Oregon employers to provide new hires with a written explanation of earnings and deductions shown on itemized statements, including:

• The employer’s established regular pay period
• A comprehensive list of:
  • All types of pay rates that employees may be eligible for, including hourly pay, salary pay, shift differentials, piece-rate pay, and commission-based pay
  • All benefit deductions and contributions
  • Every type of deduction that may apply
• The purpose of deductions that may be made during a regular pay period
• Allowances claimed as part of minimum wage
• Employer-provided benefits that may appear on an employee’s paystub as contributions or deductions
• A detailed description and definition of all payroll codes used for pay rates and deductions

This information may be provided by making it available to employes in an easily accessible location, or electronically.  BOLI is directed to provide written guidance and a list of commonly used statewide deductions to assist employers with compiling the information.

Subcontractor Wage Theft.  SB 426 (eff 1/1/26) amends ORS Chapter 652 and imposes strict joint and several liability on certain property owners and contractors for wage theft by non-union subcontractors. The law applies to most private construction projects, other than work on an owner’s principal residence and projects involving five or fewer residential or commercial units on a single tract of land. There is a notice and 21-day cure period. The owner/contractor is permitted to require subcontractors to provide certified payroll records and other relevant information, and an affidavit attesting to any proceedings involving wage law violations. Given the increased risk, contractors involved in private Oregon construction projects may want to increase their due diligence, implement robust auditing systems, review their wage claim insurance coverage, and have a system to report and respond to any wage-related notices or complaints.

Handbooks – Contract Disclaimers.  The Oregon Court of Appeals recently clarified that a handbook can form a contract unless there is a clear and conspicuous disclaimer. Although the defendant in this case had valid disclaimers on its written materials, the disclaimer in the online version was buried under several vaguely worded topics that viewers had to click through. The Court found that the disclaimer was “tucked away in a mousehole” and therefore not conspicuous enough to prevent a contract from being formed. Although the case covered student handbooks the contract principles are equally applicable in the employment context and serve as a warning to employers to be careful about placing clear and conspicuous disclaimers on employee handbooks and policies both in their written form and any online versions.

Pennsylvania (Pittsburgh) – Paid Sick Leave.  Effective 1/1/26 Pittsburgh will increase both the accrual rate and the amount of paid sick leave employees can use each year. Currently the ordinance requires one hour of sick leave for every 35 hours worked. For 15+ employers leave is capped at 40 hours per year. For those with fewer than 15 employees the cap is 24 hours per year.

The City Council amended the ordinance to require one hour of paid sick leave for every 30 hours worked, with a cap of 72 hours for 15+ employers and 48 hours for employers with fewer than 15 employees.

Vermont – Family and Medical Leave.  The Governor signed new legislation (eff. 7/1/25)   expanding the state’s Parental and Family Leave Act.  Changes include:

• Expanding the definition of a family member to provide individuals in nontraditional family structures with equal access to caregiving leave.

• Expanding the definition of parental leave to include pregnancy, an employee’s recovery from childbirth or miscarriage, or to care for a foster child, and limits baby bonding leave to within one year after the birth.

• Permitting eligible employees to take up to 12 weeks of unpaid, job-protected leave annually for safe leave if the employee or their family member is the victim of domestic violence, sexual assault, or stalking.

• Permitting eligible employees to use up to two weeks for bereavement leave (including administration or settlement of an estate) within one year of a family member’s death, with no more than five workdays to be taken consecutively.

• Permitting eligible employees to take qualifying exigency leave related to active duty service by a spouse, son, daughter or parent in the U.S. Armed Forces.