Federal Family and Medical Leave
Based on requirements under the Paperwork Reduction Act, the U.S. Department of Labor submits their existing FMLA forms to the U.S. Office of Management and Budget (OMB) every 3 years for an audit. The OMB is filing 30-day extensions for these FMLA updates and we could see more in the coming months as they continue their review.
Forms updated so far as of June 1, 2018:
- FMLA Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave
- FMLA Certification for Serious Injury or Illness of Current Servicemember for Military Family Leave
- FMLA Certification of Health Care Provider for Employee’s Serious Health Condition
- FMLA Certification of Health Care Provider for Family Member’s Serious Health Condition
- FMLA Certification of Qualifying Exigency for Military Family Leave
- FMLA Designation Notice
- FMLA Notice of Eligibility and Rights and Responsibilities
- Update your current FMLA forms.
- Stay tuned for more updates.
Supreme Court Restricts Class Action Lawsuits
For now, an inconsistency among U.S. Courts of Appeals has been settled with a U.S. Supreme Court ruling that permits class action employee waivers in arbitration situations under the Federal Arbitration Act (FAA). You can require employees to agree in writing to arbitrate any claims on an individual basis only.
- Revisit your arbitration agreements. Make sure they generally state how you want to proceed in arbitration cases.
- Class action waivers do not extend to disputes under the California Private Attorneys General Act (PAGA).
- If you need to roll out new arbitration agreements for employees, you may want to introduce them as part of an updated employee handbook.
Family HSA Contribution Limit
Between March and May 2018, the family cap for Health Saving Account (HSA) contributions shifted by $50. Last year’s $6,900 maximum remained in place as a carryover from the Obama Administration, but with the 2017 Tax Cuts and Job Act, that number was lowered to $6,850. However, the $50 difference became an administrative burden to employers so the U.S. Internal Revenue Service (IRS) reversed its decision under Revenue Procedure 17-18, and allows employees’ HSA contribution limit to be $6,900 or $6,850.
- If you made an update to $6,850 maximum in your payroll system, you will need to change it back.
- There is no change to single coverage amounts. The contribution remains at $3,450.
- If employees want to contribute the additional $50, they can make a separate after-tax contribution to their HSA (not through payroll) and then take the deduction when they file their income taxes.
- An individual who already contributed to their HSA deduction per earlier guidance can redeposit the funds by April 15, 2019. If the funds are not redeposited, the contribution will be pre-tax through payroll or after tax. If the payment was made pre-tax, withdraw funds will be taxed and subjected to a 20% excise tax, unless it was used for medical purposes. If funds were deposited after tax, the 20% would not be imposed.
Enforcement Update on Fiduciary Rule for Retirement Advisors
The fiduciary rule regulates retirement investment advisors and prevents conflicts of interest when investing people’s finances. Under it, advisors carry a high level of responsibility. The proposed rule would have eliminated many commission structures that regulate the industry. Last year, President Trump issued a memo for the U.S. Department of Labor (DOL) to reexamine the rule. For now, the matter is still pending, but the DOL has issued a temporary non-enforcement policy stipulating that advisors act in accordance with the proposed rule.
Salary Threshold for Fair Labor Standard Act Intended to Rise, Slowly
The U.S. Department of Labor recently said that it will issue a Notice of Proposed Rulemaking that will increase the salary threshold for white-collar exemptions from overtime pay. However, this rule is not expected to come out until January 2019. The impact will undoubtedly be on a smaller scale than the Obama administration had originally proposed, which was a 50% increase from $23,660 to $47,476. Right now, employers should ensure that they have a way to pull a list of employees who make below $40,000 since those employees will likely be the ones impacted.
Common Error When It Comes to Immigration Efforts and I-9s
In a U.S. Department of Justice settlement involving the University of California, the university incorrectly required immigrants to re-establish I-9 work documents when their cards expired based on their citizenship status when they were hired. This was found to be in direct violation of the Immigration and Nationality Act (INA).
- Employees with an expiring permanent resident card are not required to re-fill out the I-9.
- Immigration enforcement agencies are cracking down on I-9s. Make sure your forms are in order.
Data Breach Law
Alabama becomes one of the last states to enact a data breach notification law.
Alabama’s provisions in this law require:
- Companies to notify consumers within 45 days from when the breach was discovered.
- If a breach involves more than 1,000 consumers, then the company must notify the Alabama Attorney State General, Steve Marshall, in writing.
Pay Equity and Banning Salary Inquiries
In Connecticut, a pay equity act that will ban employers from asking about salary history during the application process will go into effect on January 1, 2019. This was enacted to stop the cycle of employers paying women lower wages.
- Applicants will have additional protections during the hiring process.
- No employer may inquire about previous wage or the value of any stock or equity options related to previous benefits.
Minneapolis Paid Sick Ordinance Stays for Employers within City Limits
A court upheld a temporary injunction that challenged Minneapolis’s Paid Sick Leave Ordinance for employers outside city limits. However, employers inside Minneapolis city limits are still mandated to comply.
If you’re outside the city limits, keep a lookout for possible appeals from the City about this decision and potential new legislation.
- Again, if you are inside city limits of Minneapolis, you must abide by the paid sick ordinance.
- Employers outside the city limits of Minneapolis are not currently required to comply.
- St. Paul has a paid sick leave ordinance and Minneapolis has a wage ordinance, both of which remain in effect.
Kansas City, Missouri Enacts Ban the Box for Small Employers
Kansas City passed its version of a ban-the-box ordinance and it will go into effect on June 9, 2018. Historically, criminal inquiries were removed from state applications. Now, private sector employers will be prohibited from inquiring about applicants’ criminal history until they are in the final hiring stages and the individual is accepted into the top pool of candidates.
- Only applies to private employers with 6+ employees.
Willmington, North Carolina Approves Ban the Box for City Employees
In an effort to discourage discrimination against individuals with a criminal record, the City has now set up new hiring process parameters. Employers can’t inquire about applicants’ criminal background history or perform background checks until after they’ve gone through the initial stages of the hiring process and are officially being considered for employment.
- Seven-year restricted inquiry for certain crimes like sexual assault, homicide, financial crimes, etc.
- Employees can provide evidence of resolution for misdemeanor cases that are 7 years or older and proceed in the applicant process.
New Jersey is Cracking Down on 1099 Misclassifications With State Task Force
In an effort to protect employees and support efforts to provide more funds for the state of New Jersey, Governor Phil Murphy signed an order to create a special task force to check employer’s compliance. This new task force is comprised of 12 New Jersey administrative agencies.
- Employers should perform audits on any 1099 contractors to ensure they are classified correctly.
New York City Grants Workers Temporary Schedule Changes for “Personal Events”
New York City is enhancing their paid and sick leave time to include accommodations for “personal events” beginning July 18, 2018. Personal events are defined as: A.) Providing care to a minor, B.) Attending any legal obligations for self or family member, or C.) Safe time and sick time.
A temporary schedule change is defined as making necessary reasonable accommodations like working remotely, changing shifts, and taking unpaid leave.
- If you’re within the city limits of New York City review your Paid Sick Leave and Safe Time policies and incorporate “personal events.”
- Employers must respond as soon as possible to a written request for personal event accommodation, but need not respond in writing.
- A response must come no later than 14 days.
- Not eligible for employees who have been employed for less than 120 days.
- Does not cover employees who are currently tied to a bargaining agreement and have a temporary schedule change agreement already in place.
- Specific restrictions apply for positions within the entertainment industry.
- Up to $500 for employees who are not terminated and $2,500 for employees who didn’t receive communication within the timeframe or 7 days from the notice.
- May be ordered to compensate employees for damages.
- Strong non-retaliation laws will be imposed by the state.
Oregon Passes Steep Restrictions for Data Breaches
On June 2, 2018, Oregon’s Governor stated that any company that collects consumer information and has a data breach must notify consumers within 45 days. If the company provides identity theft services or credit monitoring, consumers are not required to input their credit and debit card information to continue services.
If the number of consumers are greater than 250, the employer must notify the state’s Attorney General in writing and the breach will be published on the Oregon Department of Justice website.
- The rules now apply to organizations that possess personal information, not just organizations that own or license personal information.
- Prohibits credit agencies from charging a fee to consumers for lifting a security freeze regardless of confirmed or unconfirmed identity theft.
- The ordinance now extends to third parties that maintain personal information on behalf of the company and have a duty to report data breaches too.
- “Personal information” is expanded to include all other parties that have access to consumer information.
- More forms of information will need to be used to identify consumers, such as HIPAA related data.
- Provide regular training to ensure administrative safeguards are in place.
- Frequently update passwords and audit your technical safeguards to better protect consumer data.
- Understand how consumer information moves through your business operations and implement physical safeguards.
Oregon Law Amended in New State-wide Tax for Transit
On July 1, 2018, employers will now have to withhold 0.001% from Oregon residents’ wages and nonresidents who work in Oregon to be in compliance with the transportation tax. Penalties for employers will be set at $250 per employee (up to $25,000).
- Form OR-STT-1, Oregon Quarterly Statewide Transit Tax Withholding Return
- Form OR-STT-2, Statewide Transit Tax Employee Detail Report
- Form OR-STT-A, Oregon Annual Statewide Transit Tax Withholding Return
- Form OR-STT-V, Oregon Statewide Transit Tax Quarterly Payment Voucher and Instructions
Salary History Ban Overruled for Violating Free Speech
A federal judge in Pennsylvania ruled that the City of Philadelphia’s law that prohibited employers from making salary history inquiries was unconstitutional based on the first amendment right to free speech. However, employers in the City are still prohibited from using a prior salary wage to determine a person’s future wage. The City ordinance was originally enacted to help bridge the pay equity gap between women and men.
- Employers located in other cities in Pennsylvania should watch for updates to see if local ordinances shift based on this decision.
- As a best practice, you may still want to remove salary history from your application forms and list of interview questions.
- Law offices note that if you do business in Philadelphia that you will be affected by this decision. In litigation, it won’t matter if you are headquartered in another city that doesn’t have this ban in place.
Pennsylvania New Non-Resident Withholding and Reporting Requirements
Pennsylvania new Personal Income Tax Withholding requirements are created for property and businesses owners that make a trade or business payments over $5,000 or more during the year to a non-employee, an individual who is not a resident of Pennsylvania, or single member LLCs that have a nonresident owner. Owners must withhold Pennsylvania income tax if the payor files a 1099-MISC form.
The new personal income tax withholding requirements applies to payments made to non-resident lessors and non-resident independent contractors.
Accommodations Mandated for Pregnancy Needs
The Pregnancy Accommodation Act was recently passed and expands on South Carolina’s existing regulations. The latest updates cover employers with 15+ employees and require employers to provide reasonable facilities for medical needs related to pregnancy or childbirth unless it creates undue hardship for employers. No other employment-related decisions should be made based on the fact that a candidate or current employee is pregnant. Employers in South Carolina will need to update existing employees and provide new hires with a required notice before September 14, 2018.
- Provide the required notice to new hires and existing employees and post it in an accessible area.
- Update your policies associated with break times and rest periods.
- Train personnel to respond to pregnancy-related accommodations.
South Dakota Enacts Data Breach Law
One of the final states to enact a data breach law, which is now in effect. South Dakota uses many of the same principals as the other states who have passed a similar law.
- A broad definition of personal information, including employee numbers.
- Notify users within 60 days of the discovery of a breach.
- Watch for updates as all 50 states have enacted data breach enforcement laws and there may be a response at the federal level too.
Tennessee New Salesperson License
Tennessee employers must file the new salesperson license electronically through the state’s Department of Commerce and Insurance.
Vermont Passes Salary Inquiry Ban
Vermont joins other states in restricting employers from inquiring about applicants’ salary history. Vermont’s provisions state that if an employee independently offers this information, the employer can confirm that after the offer has been made and they are able to talk about their salary expectations. However, you cannot determine salary history to determine future wage. This regulation will go into effect on July 1, 2018.
- Remove language regarding salary history on your applications and interview questionnaires.
- Train personnel on not asking about salary history and how to handle candidates’ salary expectations.
Washington’s Ban the Box Update
As reported in KPA’s April HR Regulatory Updates, Washington enacted the ban-the-box law, also known as The Fair Chance Act. It prohibits employers from looking into people’s criminal history until you determine that candidates meet the basic criteria for the position. On June 7, 2018, this law takes effect for all employers regardless of their employee size. You and your hiring managers won’t be able to prohibit felons or those with criminal records from applying. Note: The City of Spokane enacts their version of this ordinance on June 14, 2018.
This act has certain exemptions and does not apply to:
- Workers with access to minors under the age of 18
- Financial institutions who are required by state or federal law to comply with criminal background records for employment purposes
- Law enforcement
- Volunteer positions
- Any organization in compliance with the SEC
- Revisit hiring procedures and interview questionnaires to remove any reference to criminal history
- Train hiring personnel on assigning wages and giving promotions
- City of Spokane employers are able to disqualify an individual if the job requirements are related to the conviction
Washington’s Domestic Leave Law
As you may have read in KPA’s April HR Regulatory Updates, starting June 7, 2018, Washington employers will have greater obligations to support employees who are the victims of domestic violence, sexual assault, stalking, or related matters. In addition to existing requirements, employers must now provide reasonable safety accommodations like:
- Modified schedule
- Change in personal information
- Safety protocols
- Any others unless it would cause an undue hardship
- Update your policies and train managers on how to respond to employees who need domestic violence support.
- Revise your nondisclosure agreements. You can no longer prevent employees from exposing workplace sexual harassment.
- Employers are prohibited from requiring employees to handle discrimination matters through confidential arbitration.
Deductions for Unreturned Property from Final Pay
West Virginia employers can now deduct unreturned property expenses from an employee’s final paycheck. This became effective May 15, 2018.
- Update your employee handbook about returning company property and the consequences of failing to do so.