Congressional Workplace Compliance News & Resources
The United States Congress is always working to write and pass legislation that will impact every aspect of American life. In particular, KPA keeps an eye on the bills and laws that will impact workplace compliance and labor.
Below you’ll find the summaries and action items of new laws that will impact your business and your employees.
Keep up with safety and compliance the right way with this information but seek out your legal counsel when you’re seeking further guidance and more information on how this news directly impacts your business.
Past Congressional Workplace Compliance News
Who: All employers
When: Effective immediately
President Biden signed the 2023 Consolidated Appropriations Act into law on December 29, 2022, which contains the SECURE Act 2.0 of 2022. The SECURE Act greatly impacts retirement savings plans. Some provisions go into effect immediately or over the next 12 months, while others will go into effect over the following several years.
The provisions that went into effect January 2023 include:
- Employers with 50 or fewer employees creating new plans on January 1, 2023, or later will be able to take advantage of increased tax credits to offset the start-up costs of implementing a new retirement plan. There are also additional credits for employer contributions to the plan over the first five years.
- The Employee Retirement Income Security Act (ERISA) and Internal Revenue Code were amended to mandate automatic enrollment in Section 401(k) and 403(b) plans. Effective for new plans adopted after December 29, 2022, automatic enrollment is required of most major employers. Automatic deferrals will range from 3% to 10% of income. Employees can opt out. There is also a requirement for automatic escalation that increases a participant’s deferrals by one percentage point per year to at least 10% with a ceiling of 15%. These provisions will not become effective until January 1, 2025.
- Effective 2023, employees can elect to have their employer direct matching contributions to their Roth workplace account. Those matches will be taxable income in the year of the distribution.
- Effective 2023, employers may create Roth accounts for SIMPLE and SEP plans that allow after-tax contributions as well as pre-tax contributions.
- Effective 2023, those with a terminal illness or a condition that could reasonably result in death in 84 months or less may take penalty-free early withdrawals from their retirement plan. To avoid the penalty, the person must repay distributions within three years.
- Effective for plan years beginning after December 29, 2022, employers can offer de minimis financial incentives to employees that make salary deferral contributions under a 401(k) or 403(b) plan.
- The age for Required Minimum Distributions increases to 73 effective January 1, 2023.
- If a person does not take the minimum distributions on time, the tax penalty is reduced from 50% to 25% of the amount not taken for tax years beginning after December 29, 2022.
- Beginning in 2023, people aged 70½ and older may elect a one-time $50,000 gift as part of their qualified charitable deduction. This amount will be adjusted annually for inflation. The gift must be made to a charitable remainder unitrust, a charitable remainder annuity trust, or a charitable gift annuity. The amount counts toward the annual RMD where applicable. The gift must come directly from the IRA by the end of the calendar year.
- Starting January 1, 2023, the dollar limitation for qualified longevity annuity contracts (QLACs) premiums increases from $145,000 to $200,000. The law also eliminates a previous requirement that limited premiums to 25% of an individual’s retirement account balance.
- For plan years starting January 1, 2023, plan sponsors no longer have to provide certain notices to employees who have elected not to participate in the retirement plan. Instead, the sponsor must send an annual notice of the employee’s eligibility and the enrollment deadlines.
- Effective 2023, certain RMD barriers affecting the availability of lifetime annuities in qualified plans and IRAs are eliminated.
- Consult with your service providers and legal counsel to make the necessary changes that will bring you into compliance.
- Update your retirement plan documents to reflect the new rules.
- Inform employees about the changes to your retirement plan(s).
Who: All employers
When: Effective immediately
President Biden signed the Speak Out Act into law on December 7, 2022. The law went into effect immediately and limits the enforceability of nondisclosure and nondisparagement clauses related to sexual assault and sexual harassment allegations. The purpose is to prevent employers from silencing workers who want to speak out about sexual misconduct in their workplace. The law applies only to agreements entered into with current, former, and prospective employees, and independent contractors before a sexual assault or sexual harassment dispute has arisen.
A nondisclosure clause is one that requires the parties not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the agreement. A nondisparagement clause is one that requires one or more parties not to make a negative statement about another party that relates to the agreement, claim, or case. Under the Act, if the parties sign an agreement containing such clauses pre-dispute, the clauses are not enforceable.
A sexual assault dispute is one “involving a nonconsensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18, United States Code, or similar applicable Tribal or State law, including when the victim lacks capacity to consent.” A sexual harassment dispute is one that relates to “conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.”
The Speak Out Act law does apply to agreements signed before December 7, 2022, but not in cases where the parties agreed to the clauses AND the dispute was active before December 7, 2022. Effectively, this means the law applies to agreements entered into before its effective date, but only when the sexual misconduct claim was filed after that date.
An employer may include such clauses in an agreement in connection with the settlement of a claim or dispute related to alleged sexual misconduct. Employers may continue to use nondisclosure clauses to protect their trade secrets and proprietary information.
Employers need to be mindful of local and state laws that impact these types of clauses in pre-dispute agreements.
- With the assistance of competent counsel, review your employment handbook, policies, and pre-hire and employment agreements that contain arbitration, confidentiality, nondisclosure, or nondisparagement terms and update them as needed to comply with the law.
Who: Federal government employers
When: Effective immediately
President Biden signed S 2551, the Artificial Intelligence Training for the Acquisition Workforce Act, otherwise known as the AI Training Act, into law on October 17, 2022. The newly required training will help federal government agency employees who purchase and manage artificial intelligence (AI) understand how AI works, along with its risks and benefits. The law does not affect private employers or federal government contractors.
The Office of Management and Budget (OMB) has a year to develop the AI training, which must include:
- The science of AI and how it works;
- Basic technological features of AI systems;
- How AI can benefit the federal government;
- Risks associated with AI, including discrimination and privacy risks;
- How to mitigate those risks, including how to identify AI that is safe and reliable; and
- Future trends in AI.
The OMB must update the AI training every two years, measure rates of participation, and develop a participant feedback mechanism.
- Monitor for the OMB’s release of the AI training.
- Evaluate AI software and services for discrimination and privacy risks.
Who: All employers
When: Effective March 3, 2022
What: The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445) was originally introduced in 2017 in response to the “Me Too” movement, and on March 3, 2022, President Joseph Biden signed it into law. The law amends the Federal Arbitration Act by restricting employers from forcing employees to arbitrate sexual harassment and sexual assault claims. The purpose behind this law is to allow greater transparency in relation to workplace sexual assault and harassment claims by giving survivors the opportunity to have their day in court. This law may have wide-ranging impacts on employers, as it is estimated that around 60 million workers are currently bound by forced arbitration clauses in their employment agreements.
The law encompasses all agreements that would prevent or waive the right to arbitrate sexual assault or harassment claims. Specifically, the Act states, “no predispute arbitration agreement or predispute joint-action waiver [with respect to sexual assault or sexual harassment] shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law.” Further, the law invalidates clauses in employment agreements that waive the right to bring a class action alleging sexual assault or sexual harassment.
Of note, the law does not prevent employers from mandating arbitration for claims not involving sexual assault or harassment. Moreover, the law does not prevent arbitration of sexual assault or harassment claims if the employer and employee agree to do so after the events have occurred.
Employers should also pay special attention to their state laws, which may have even more stringent requirements than this new federal law.
- Review your existing mandatory arbitration clauses and consult competent counsel about amending those that may no longer be enforceable. It is advised to seek legal counsel.
- Monitor how the law is applied in your state’s courts.
- Review your anti-discrimination training programs to ensure that they cover all forms of discrimination and harassment rather than focusing on sexual harassment.
- Continue to monitor for interpretation, additional guidance, and how the scope of the law is determined by the courts.
Statement of Administration Policy H.R. 4445 – Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (February 1, 2022)
Remarks by Vice President Harris at Signing of H.R. 4445, “Ending the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021”