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November 2018 HR Regulatory Updates

Camille Bradbury /
Text: "Regulatory Update"

This blog post covers timely federal and state legislative employment updates. Check out what you need to know and gain compliance tips to help you stay on top of HR, the right way. Click on the federal topics or state names below to catch up on the latest news.


STATE Updates


Is the EEOC Planning an On-site Visit to Your Office?
Effective: Immediately

If you’ve been charged with an Equal Employment Opportunity Commission (EEOC) discrimination claim, start preparing for an onsite visit from them. They’ll investigate your facility and follow up on improvements and changes you have made since the claim was filed.

If you receive a notice for an EEOC onsite visit, here are some preparations to consider:

  • Review the charge and inform all managers so there are no surprises on the day of the visit.
  • Review your anti-retaliation policies and anti-discrimination efforts with your staff.
  • Draft an opening statement that provides an overview of your company’s best practices against discrimination.
  • Know the facts of the discrimination claim and highlight your culture’s strengths.
  • Plan the route you are going to take the EEOC representatives through your building. Consider walking by labor and employee rights posters.
  • Be prepared to present findings from your discrimination investigation and show relevant documentation.
  • Provide your anti-discrimination training records.

Recording is permitted and encouraged by both parties. Follow up the EEOC’s visit with a summary of main points and any supporting documentation. Being proactive, submitting supporting documents, and cooperating with the EEOC should help.

WHD Reveals Plans to Update Joint Employment and Overtime Pay 
Effective: December 2018 Expected Update

The Department of Labor released its Regulatory Agenda for Fall 2018. This agenda highlights what the department is working on now and in the near future. It has a spotlight on the Wage and Hour Division (WHD) too. WHD was going to increase the salary threshold for overtime exemption at the end of President Obama’s term. However, that’s delayed until March 2019 now and there will be a smaller incremental increase to ease the burden on employers.

Joint employment is also on the table for WHD. An updated rule is expected in December 2018. WHD will define a joint employment partnership. This will make it more difficult to be classified as a joint employer and potentially lower employers’ liability with partners like staffing agencies and franchises.

The National Labor Relations Board (NLRB) has extended the time for employers to submit comments about the joint employer rulemaking until Thursday, December 13, 2018. Submit comments here.

WHD Extends PAID Program to Resolve FLSA Violations 
Effective: Until March 2019

The Wage and Hour Division’s (WHD) nationwide Payroll Audit Independent Determination (PAID) Program helps resolve the Fair Labor Standards Act (FLSA) violations. This program may keep employers out of litigation while still recovering back wages.


  • This program addresses back wages that the Department of Labor (DOL) doesn’t currently investigate or employers with a pending claim.
  • This program will continue until March 2019.
  • Consult your legal counsel before participating in PAID. Every case has unique circumstances that may not result in a resolved claim.

Additional Resources:
Wage and Hour Division: PAID

States with No Right-to-Work Laws & Local Ordinances
Effective: Now

U.S. Courts of Appeals have been reviewing the National Labor Relations Act (NRLA) as it applies to states establishing right-to-work ordinances. However, the sixth and seventh circuits have differing opinions. Right-to-work permits employees not to join a union, enter into a collective bargaining agreement, nor financially support a union. In states that don’t have right-to-work laws, unions are trying to keep it that way.

At the end of September 2018, in International Union of Operating Engineers Local 399, et al. v. Village of Lincolnshire et al., the Seventh Court of Appeals ruled that municipalities were restricted from passing right-to-work ordinances. In 2016, the Sixth Court of Appeals ruled in UAW et al. v. Hardin County Kentucky, et al. that municipalities could make their own laws regarding union security clauses. This issue will likely make its way to the U.S. Supreme Court to settle the score.

Current Regulations:

  • The Seventh Circuit governs Indiana, Illinois, and Wisconsin. These states are restricted from passing right-to-work ordinances.
  • The Sixth Circuit governs Kentucky, Ohio, Michigan, and Tennessee. Those states are allowed to adopt right-to-work ordinances.

If your state has no right-to-work law, watch for legislative updates.

Association Retirement Plans: New Option for Small Business Owners
Effective: Stay Tuned

As published in the Federal Register on October 23, 2018, a proposed rule suggested affordable retirement options for small business owners could be on the horizon. How? By expanding the definition of employer association or group and professional employer. This is similar to how multiple employers can form an association to sponsor a health plan.

Most workers of small business owners, sole proprietors, and gig contractors don’t save for retirement because their employer can’t offer a plan. Offering any 401(k) plan can be burdensome for small employers. The proposed option allows small employers to join together with other small employers based on a geographical area or a particular industry nationwide. It would not be treated as an ERISA-sponsored plan, but as a single employee benefit plan.

The U.S. House of Representatives passed the Family Savings Act in September 2018, which would allow open multi-employer plans (MEP) to band together as an association. A similar bill, known as the Retirement Employment Saving Act (RESA) is before the Senate. If the Senate passes it before 2019, both bills will be reconciled. If Congress then approves the combined bill, it will become law in December 2018.

Have an opinion about this? Employers can electronically submit their comments about association retirement plans here until December 24, 2018.

Court Rules DACA Workers Authorized to Work in the U.S., For Now
Effective: Now

U.S. workers currently covered under Deferred Action Childhood Arrivals (DACA) can continue to renew their temporary work authorizations according to the 9th U.S. Circuit Court of Appeals. DACA allows people who came to the U.S. as children and meet certain requirements to request deferred action and to obtain work permits. This program affects nearly 700,000 immigrants. The Trump Administration argued presidential overreach with the DACA program, but the Court of Appeals ruled that the President cannot immediately end the program.

The case will now make its way to U.S. Supreme Court. For now, employers should continue to process I-9 compliance forms.

A Relief to Hospitality Employers, DOL Ditches 80/20 Rule
Effective: November 8, 2018

Employers are required to pay nonexempt employees who work 40 hours in a workweek at least the federal minimum wage ($7.25). Section 203(m) of the Fair Labor Standards Act states employers can claim a tip credit if workers within a tipped occupation regularly collect more than $30 in tips that satisfy the minimum wage requirement. This credit reduces the direct wages employers owe.

The 80/20 rule was enacted in 2009. Under it, employers cannot claim a tip credit if workers spend more than 20% of their time on non-related job duties. This created an extra burden on employers to accurately calculate time employees spent doing related duties vs. non-related duties. The U.S. Wage and Hour Division reissued an opinion letter with an official rule effective November 8, 2018 , withdrawing the 80/20 rule.


  • Duties performed by tipped employees are part of the occupation if they’re directly related to the employee’s occupation.
  • All duties should be considered directly related if they are performed during, prior to, or after customer service duties.
  • For guidance on which duties are “directly related,” refer to 29 C.F.R. 531.56(e) and Occupational Information Network (O*NET) lists.



Kentucky Employers Can’t Require Arbitration as a Condition of Employment 
Effective Date: Immediately

In Northern Kentucky Area Development District (NKADD) v. Snyder, the Kentucky Supreme Court ruled that arbitration agreements should not be a condition of employment. Synder sued NKADD under the Whistleblower Protection Act. Kentucky’s ruling may come as a surprise considering the U.S. Supreme Court’s decision in Epic Systems Corporation v. Lewis. In that case, the courts ruled that arbitration agreements would be allowed. The Kentucky Supreme Court justices said they didn’t disagree with the federal court’s decision. Nonetheless, they added that in the state of Kentucky, employees are not required to sign an arbitration agreement as a condition of their employment. You can still encourage employees to use arbitration, but you can’t expect employees to waive their rights to other forms of litigation as a condition of employment at your organization.


  • If you’re sued in Kentucky State Courts for these agreements, you can appeal to a federal court where your arbitration agreement will likely hold up.
  • Review and correct the language in your arbitration agreements. Remove verbiage that implies that an agreement is a condition of a candidate’s offer.
  • Have legal counsel review your arbitration materials.

Kentucky’s Right-to-Work Law Stands 
Effective Date: Now

Right-to-work laws allow employees to be hired without being required to join a union, pay union fees, or enter into a collective bargaining agreement. The Kentucky State Supreme Court upheld the law becoming the 27th state to enact a right to work law that prohibits public and private employers from compelling a person to join a union as a condition of employment or of being hired.


  • Review union agreements that are being renewed, renegotiated or extended to ensure that they abide by the provisions of the right-to-work law.
  • Special considerations that only apply to public employees:
  • This law prohibits deducting dues and other similar payments from a public employee’s pay without written consent. They can easily withdraw their consent as well.
  • This law also prohibits public sector employees from engaging in strikes or other work stoppages (private employees are still authorized to engage in these actions).

New York

Minimum Wage Increases for the State of New York 
Effective Date: December 31, 2018

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Additional Resources
New York Minimum Wage Poster

State of New York Releases Sexual Harassment Training Videos 
Effective Date: Now

We’ve been covering New York sexual harassment requirements and the State of New York continues to release new materials to help employers comply with the regulations. Effective October 9, 2018, all employers are required to adopt sexual harassment prevention policies. By October 9, 2019, employers must provide interactive anti-harassment training for employees and then once every year. KPA’s “Anti-Harassment Training” meets the state’s interactivity requirements and is available to our software clients.

Employers in New York can review the new sexual harassment videos released by the State of New York. However, these trainings are not interactive and require additional follow-up.

If you are planning to use the state’s videos, you must also include a portion where you ask employees questions, accommodate their questions, and require employees to provide feedback about the training. Again, using the states training videos will not satisfy the law’s interactivity requirement.


To meet the training requirements employers can:

  • Adopt the state’s model training materials including scripts, slides, and/or case studies.
  • Provide other live training or interactive online/video training that meets or exceeds the state’s standards.

The state also released a webinar for employers to give them an overview of recent changes to the law.

North Carolina

North Carolina Creates Certificate of Relief to Help Ex-Criminals 

Effective: December 1, 2018

House Bill HB 774 allows employers in North Carolina to rely on a convicted criminal’s certificate of relief as part of their screening process. A certificate of relief signals to the public, employers, and other agencies that an applicant should be considered for hire despite their criminal history. The certificate is not a pardon or relief from probation or the like, but it protects employers from litigation arising out of negligent claims as a result of the hiring decision. The hiring decision must be based on the certificate of relief, at the time of hire to qualify for protection. Employees must notify employers within 10 days if their certificate is modified, changed, or they have a new conviction since they were hired.


Pennsylvania Introduces Clean Slate Bill to Help Non-Violent Criminals 
Effective Date: December 25, 2018

Pennsylvania’s House Bill 1419, the Clean Slate Bill is the first of its kind to break down barriers for nonviolent criminals to gain employment and access to fair housing. The bill allows offenders to petition the court to have their records sealed if they have:

  • A nonviolent misdemeanor record with 1+ year in jail, no convictions in the last 10 years, and they have paid all fines and costs.
  • An automatic seal will be applied for a second or third-degree misdemeanor that carries a sentence of 2 years or less and they have no other convictions during the last 10 years.

Violent offenses involving gun charges, sexual assaults/rapes, murder, kidnapping, or child endangerment are not included in this bill.

South Carolina  

South Carolina Removes Barriers for Criminals to Enter the Workforce  
Effective Date: December 27, 2018

Act No. 254 allows individuals to petition the court to expunge certain criminal offenses. The labor shortage In South Carolina has prompted legislators to look at where the law restricts people with juvenile crimes, minor incidences, and low-level drug charges from entering the workforce. If the petition is successful, candidates don’t have to disclose if they have criminal background history on employment applications.


  • The law allows for individuals to erase closely connected convictions if they resulted from the same hearing.
  • First offense, simple drug charges or intents to distribute can be petitioned for expungement.
  • Individuals can request to remove first-time offense convictions.
  • The person must have no convictions for the last 3-5 years in order to petition for expungement.
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