New 2020 Labor Laws to Know
While there’s been a little restructuring of employment law at the federal level, there have been a few major changes to labor laws at the state and local government levels. We’ve outlined a few of the new 2020 labor laws that you should know about in order to keep your business compliant, efficient, and running smoothly.
Annual Salary and Minimum Wages
In regards to federal labor laws, a final rule issued by the US Department of Labor (DOL) will be effective in 2020 that amends the Fair Labor Standards Act (FLSA) regulations to:
- Increase the minimum annual salary for most exempt employees paid on a salary basis from its current level of $455 per week (or $23,660 per year) to $684 per week (or $35,568 per year)
- Allow employers to count nondiscretionary bonuses and incentive payments, including commissions, to satisfy up to 10% of the standard salary level test, as long as they are paid annually or more frequently
- An increase from $100,000 to $107,432 the minimum annual salary for highly compensated employees who face a looser duties test
The DOL estimates an additional 1.3 million workers who are currently exempt from overtime are projected to become eligible for overtime unless their employers reorganize to avoid payment of overtime pay.
The federal minimum wage hasn’t increased in the last decade, and won’t increase in 2020. At $7.25 an hour, it’s simply not enough for workers to make a living in many areas of the country. Consequently, most states have established their own rates.
Sick and Medical Leave
More and more states and cities are enacting various paid leave or medical leave laws that require more benefits than federal laws. For example, Nevada is introducing a new paid leave law that allows leave for any reason. Massachusetts has a paid family medical leave act in place with new benefits starting this year. The benefits in New York, California, Arizona and the city of Dallas also are going to increase.
For employers doing business in multiple states, having different laws formed by local government is going to be an ongoing concern. Every jurisdiction is different and it all supplements what’s available under the (federal) Family Medical Leave Act.
Mandatory Sexual Harassment Prevention
The number of sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission has increased. As a result, harassment prevention has become more important for workers, businesses and lawmakers.
Lawmakers are requiring businesses to train employees and post notices regarding their rights and responsibilities. For example, Connecticut businesses with three or more employees must post notices to workers concerning the illegality of sexual harassment and remedies available to victims of sexual harassment.
Arbitration Agreements
Some organizations mandate that employees agree to arbitrate any disputes they have, as a condition of employment. Federal law has been very friendly to those types of arbitration agreements, but that’s not the case in many states.
For example, 2020 labor laws in California include employers not being able to require employees to arbitrate discrimination claims. As a result, other states may start mirroring what’s going on in California and create their own prohibition against arbitration agreements.
Independent Contractors
Many businesses rely on independent contractor relationships, which has led to some states beginning to enact laws restricting an employer’s ability to classify an employee as an independent contractor. There are a variety of different tests to determine the difference for an independent contractor or an employee, but those tests seem to be in flux.
Unfortunately, different courts in different parts of the country apply different tests to determine what factors are applied to determine independent contractors, so there is no clear answer. As a response to inactivity at the federal level, state, city and county governments will be busy in 2020 to pass their own mandatory laws.
Pay Equity
Perhaps the biggest HR compliance development in 2020 will be the push for pay equity. Several states have passed new HR Rules that prohibit employers from asking about current or past salary when hiring.
The reason for these 2020 labor laws is to force employers to make salary offers based on experience, education, and talent. If HR doesn’t know what salary a candidate currently receives, the offer has to be based on merit. The applicant won’t get an offer that’s less than his or her credentials, just because of past employer discrimination.
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About The Author
Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.