Along with resolutions and goal-setting, 2020 also brings additional employment laws. Businesses need to stay abreast of such changes in order to remain compliant and minimize costly litigation.
One of the easiest ways for businesses to stay on top of ever-changing employment laws is to partner with a Professional Employer Organization (PEO) such as Resourcing Edge. The HR professionals at a PEO can help you with legally compliant policies and handbooks so that you can concentrate on profitability. Resourcing Edge utilizes cutting edge HRIS technology that provides automatic handbook updates when laws change, a learning management system to train your employees, and a database of federal and state laws so that you are always advised of best practices.
For 2020, all employers face the change in the federal overtime rule and depending on your state, you may have obligations under new laws related to paid leave and pay equity. These are just a few examples. Other important changes are in handling medical marijuana and salary history bans. Let a PEO make sure your business has all employment law changes covered.
Federal Overtime Rule
It’s been 15 years since American workers last had a change in overtime “white collar” exemptions. A significant change was pursued under the Obama administration but litigation stalled the matter and a new administration took office before implementation. The final overtime rule was announced in September 2019 and went into effect on January 1.
Under the new rule, the minimum salary level for exempt status increases to $684 per week ($35,568 annualized). Up to 10% of that minimum ($3,556.80) can be paid in commissions, bonuses, and other non-discretionary incentives. But if employers are off by even a dollar in the minimum salary, they will owe shorted employees OT for the entire year. When you partner with a PEO, you will have a payroll team and HR pros that can help you with changes to the Fair Labor Standards Act.
The hottest topic of 2019 remains for 2020: paid leave. A leave under the Federal Family Medical Leave Act is an unpaid benefit. But more cities and states are enacting paid leave laws. Examples include Nevada where eligible employees will receive paid leave for any reason. Paid family medical leave benefits begin in Massachusetts this year as well. Dozens of states and more than 30 cities have some form of paid leave.
Keeping track of the legal compliance for paid leave is a challenge for businesses, especially if they are multijurisdictional. Companies with employees in California, Washington state, and the city of Dallas, Texas, for example, must comply with the paid leave laws for all those locations and each differ significantly from the other. That’s where a PEO can help.
The federal Equal Pay Act (EPA) was passed in 1963 and requires that men and women in the same workplace be compensated with equal pay for equal work, which includes base salary or wages, overtime, bonuses, benefits, and any other perks or remuneration. So you may be wondering why nearly 60 years later it would be included in a review of new employment laws. It’s because the federal law is relatively weak legislation that provides employers with a number of ways to still pay a disparate wage. For instance, if an employer can show a difference in seniority, merit, qualifications, skills, education, or level of responsibility, it can pay differently for the same job.
Almost every state has an equal pay law on the basis of gender. Most offer more stringent protections and require that pay differential be justified by factors other than sex such as job-related to the position and consistent with business necessity. In addition, several states have recently expanded equal pay to other protected statuses including race, ethnicity, and religion.
A PEO Can Help with Employment Law Compliance
Staying up-to-date on legal compliance is a full-time job and as a business owner, you don’t have the time, inclination, or likely the expertise to do so. But by partnering with a PEO like Resourcing Edge, HR pros can keep your business compliant and let you concentrate on what you do best. If the fast-changing employment laws have you racing to catch up, contact Resourcing Edge today about how we can help.
Kim Freeman is the Director of HR Services at Resourcing Edge and a licensed attorney. The information presented in this article is for informational purposes only and does not constitute legal advice or create a lawyer-client relationship.