While state legislatures focused much-needed attention on pandemic-related legislation throughout most of 2020, many continued to alter their employment laws in significant ways, or simply had previously passed laws scheduled to take effect at the start of 2021.
Some of the most prominent trends at the state and local level include creating or expanding paid leave benefits, pay equity, and anti-discrimination rules; restricting criminal background checks; and limiting the scope of non-compete laws. Employers should review these developments and consider updating their policies and procedures accordingly.
This Advisory provides a summary of major employment-related laws that take effect in 2021 in the following states and localities: [1]
Note that this summary does not include minimum wage requirements. For that information, please review our recent blog post regarding 2021 minimum wage increases. For information on changes in the exempt salary threshold requirements by state, see the chart at the end of this Advisory.
California Family Rights Act
The California Family Rights Act (“CFRA”) has been expanded through SB-1383. Effective January 1, 2021, it is unlawful for any employer with five or more employees to refuse to provide covered employees up to 12 workweeks of unpaid, job-protected leave during any 12-month period to bond with a new child or to care for their own serious medical condition or that of the employee’s child, parent, spouse, or domestic partner. The law adds three categories of family members—grandparents, grandchildren, and siblings—and also eliminates the 75-mile radius for purposes of counting employees (but keeps the eligibility requirement that the employee must have worked at least 1,250 hours for the employer during the previous 12-month period). In addition, if both parents are employees, employers must now provide both of them with up to 12 weeks of bonding leave. Notably, the new law also repeals the New Parent Leave Act as of January 1, 2021, because the expanded CFRA now covers smaller employers and subsumes these requirements.
Paid Family Leave
California’s Paid Family Leave program was expanded by AB 2399, which as of January 1, 2021, tracks the amendments to CFRA and permits taking time off to participate in a qualifying exigency related to the covered active duty or call to covered active duty of an individual’s spouse, domestic partner, child, or parent in the U.S. Armed Forces.
Kin Care
Under the original law, employers had to allow employees to use at least half of their accrued sick leave to care for a family member with an illness (“kin care”). AB-2017 amends the kin care law to provide, effective January 1, 2021, that the designation of sick leave for kin care purposes is at the “sole discretion” of the employee. However, employees must still be permitted to use all of their mandatory paid sick time provided pursuant to the California Healthy Workplace, Healthy Families Act, and applicable local ordinances, to care for a family member. The kin care law only applies to additional sick leave time voluntarily provided by an employer where the employer limits the amount of that additional time that an employee may use to care for family members.
Employer Pay Data Reporting
SB-973 requires, on or before March 31, 2021—and on or before March 31 each year thereafter—a private employer that has 100 or more employees to submit a pay data report to the California Department of Fair Employment and Housing containing certain wage information for specified job categories by race, ethnicity, and sex.
Paid Time Off for Crime Victims
AB-2992 amends the California Labor Code to provide victims of violent crimes and families of homicide victims with expanded job-protected, unpaid leave. Specifically, in addition to protections for victims of domestic violence, sexual assault, or stalking, the law now prohibits discharging, discriminating against, and retaliating against employees who take time off because they are victims of “other crime or abuse … that caused physical injury or that caused mental injury and a threat of physical injury” or when “a person whose immediate family member is deceased as the direct result of the crime.” The law also prohibits employers with 25 or more employees from discharging or discriminating or retaliating against employees who are victims of covered crimes for taking time off to seek medical care, counseling, or other related services.
Settlement Agreements in Employment Disputes
Currently, California’s Code of Civil Procedure section 100.2 prohibits the use of no-rehire provisions in settlement agreements of employment-related disputes, except if the employer has made a good faith determination that the aggrieved party engaged in sexual harassment or sexual assault. AB-2143 amends the law to permit a no-rehire provision if the aggrieved party has engaged in criminal conduct. For the sexual harassment/sexual assault/criminal conduct exception to apply, an employer must have made and documented in good faith a determination of such conduct before the aggrieved party filed the claim against the employer. The law also clarifies that to be considered an “aggrieved party” covered by the statute, employees must file their claim against the employer in good faith.
Statute of Limitations for Labor Code Complaints
Effective January 1, 2021, AB-1947 allows a person who believes that they have been discharged or otherwise discriminated against in violation of any law enforced by the Labor Commissioner to file a complaint with the Department of Labor Standards Enforcement within one year (previously six months) after the alleged violation.
Representation for Financially Disabled Persons in Arbitration
Also effective January 1, SB-1384 expands the Labor Commissioner’s representation in arbitrations for claimants who cannot afford counsel, requires employers to serve petitions to compel arbitration on the Labor Commissioner, and allows the Labor Commissioner to represent claimants in proceedings to determine whether arbitration agreements are enforceable.
Child Abuse and Neglect Reporting
Beginning January 1, 2021, the California Child Abuse and Neglect Reporting law, AB 1963, which requires certain individuals to report suspicions of child abuse to the proper authorities, adds human resource professionals who work for businesses that employ five or more employees and employ minors to the list of mandated reporters. Under the law, mandated reporters must receive required training and a written statement of their obligations.
Diversity on Corporate Boards
AB-979 will require publicly held domestic or foreign corporations with principal executive offices in California to have at least one director from an underrepresented community by the end of 2021, and additional directors from an underrepresented community by the end of 2022, depending on the total number of directors. Prior law required such corporations to have a minimum number of female directors on their boards, depending on the total number of directors.
For more information on these and other updates, please review our recent Act Now Advisory on new California laws.
COVID-19-Related Laws
Effective January 1, 2021, AB-685 requires employers to:
- provide written notification to all employees at an exposed worksite of potential exposure to COVID-19 within one business day of notice of potential exposure, and
- notify local public health agencies within 48 hours of becoming aware of an “outbreak” (defined as three or more confirmed cases of COVID-19 within a two-week period among employees who live in different households).
The law allows California’s Division of Occupational Safety and Health (“Cal/OSHA”) to issue orders to shut down entire worksites, or specific worksite areas, that expose employees to an imminent hazard related to COVID-19, and enables Cal/OSHA to issue citations for serious violations related to COVID-19 without giving employers 15-days’ notice before issuance.
For more information on these and other COVID-19 related laws, please review our COVID-19-specific Act Now Advisory on emergency regulations and our recent Act Now Advisory on new California laws.
Paid Sick Leave
Effective January 1, 2021, Colorado requires that all employers with 16 or more employees grant paid sick leave to employees. On January 1, 2022, paid sick leave obligations will apply to all employers, regardless of size. For details on accrual and permissible uses, please see our recent Act Now Advisory and recent interpretive guidance from the Colorado Department of Labor and Employment (“Colorado DLE”).
Public Health Emergency Paid Sick Leave (“PHEL”)
On December 23, 2020, the Colorado DLE published interpretive guidance clarifying that, as a result of the ongoing COVID-19 public health emergency, employers of all sizes must provide employees access to up to 80 hours of PHEL as of January 1, 2021. The entitlement to 80 hours of PHEL in 2021 may not be reduced by any COVID-19 PHEL provided in 2020.
Unemployment
On July 14, 2020, Colorado enacted SB 20-170, which substitutes (and defines) the term “severance allowance” for the term “remuneration” when calculating how unemployment benefits will be delayed because the employee received severance pay. Effective January 1, 2021, the law also eliminates documentation requirements for employees who assert that they left their job because of domestic violence when a worker reasonably believes that continued employment would jeopardize the worker’s safety, or the safety of any member of the worker’s immediate family.
Equal Pay
Effective January 1, 2021, the Equal Pay for Equal Work Act mandates, among a host of other requirements, transparency in wages and notice to employees of promotional opportunities, which must include the hourly or salary compensation, or, at the very least, a pay range. The law also prohibits discrimination based on sex and gender identity, and bans employers from seeking salary history or criminal history from job applicants. For more information, please see our blog post and the recently published interpretive guidance from the Colorado DLE.
Wages
On November 10, 2020, the Colorado DLE’s Division of Labor Standards and Statistics published the final version of Colorado Overtime and Minimum Pay Standards Order Number 37 (COMPS #37), which took effect on January 1, 2021. Significantly, COMPS #37 incorporates updates to Colorado’s exemptions from state minimum wage and overtime requirements.
Paid Family and Medical Leave
As of January 1, 2021, employees must make quarterly payroll contributions, at one-half of one percent of wages, to the Connecticut Paid Leave Authority trust fund. Connecticut employers are not responsible for making any contributions to the program. Benefit payments for approved paid leave applications begin in January 2022. For more information, please review our Act Now Advisory and the newly created Connecticut Paid Leave website.
Criminal Background Information
Effective January 1, 2021, SB 288 provides for the expungement of certain misdemeanor convictions and provides liability protection for employers. SB 288 prohibits introduction of criminal history information of any employee in an action against an employer based upon the conduct of such employee under certain circumstances.
Wage Garnishments
SB 443, effective January 1, 2021, limits the maximum amount of wages that are subject to garnishment for specified educational or student loans to 15 percent of an individual’s weekly disposable earnings.
Domestic Violence and Sexual Assault Leave
As of January 1, 2021, SB 2638 amends Section 378-2 of Hawaii’s Revised Statutes by changing the types of documents an employer may request of an employee to verify that the employee is a victim of domestic or sexual violence.
Predictive Scheduling (Chicago)
Chicago’s Fair Workweek Ordinance, which was originally slated to become effective July 1, 2020, was delayed for six months and took effect on January 1, 2021. For employees making equal to or less than $26/hour or $50,000 annually, the ordinance requires certain employers (including restaurants, hotels, health care employers, building services, manufacturing, warehouse services, and retail employers) with at least 100 employees globally (250 employees and 30 locations for a restaurant) to, among other things:
- provide written work schedules at least 10 days (14 days beginning July 1, 2022) in advance of the first day of any new schedule and additional pay if changes are made within the 10 days;
- at the time of hire, give written, good faith (but not binding) estimates of projected days and hours of work to new workers for the first 90 days of employment, and, if a new hire requests modifications to their projected work schedule, provide written acceptance or rejection within three days of such request;
- post schedules at least 10 days prior to the first day of scheduled work;
- advise employees in writing within 24 hours of any schedule change (an employee may be entitled to compensation if this change occurs within the 10- or 14-day advance notice period); and
- provide employees the right to decline previously unscheduled hours.
Paid Family and Medical Leave Law
On December 15, 2020, workers became eligible to take paid family leave to bond with a newborn, newly adopted child, or new foster child. In addition, effective January 1, 2021, workers may take:
- paid family leave to care for a sick family member and/or manage family affairs for a family member if that family member is on active military duty in a foreign country, and
- medical leave to manage a personal illness or serious injury.
Beginning July 1, 2021, paid family and medical leave benefits will become available to care for any covered family member with a serious health condition. For more information, please review our recent Act Now Advisory.
Paid Leave
Effective January 1, 2021, employers with more than 10 employees in the usual and regular course of business for more than 120 days in any calendar year, with certain exceptions, must provide paid leave to employees, accrued at a rate of one hour for every 40 hours worked, up to 40 hours per year (SP 110 – LD 369). Employees can use this benefit for any reason, including, but not limited to, emergencies, illness, sudden necessity, or planned vacations. For more information, please see our Act Now Advisory and the rules promulgated by the Maine Department of Labor governing notice requirements, scheduling, and penalties for denial of paid leave.
Freelance Worker Protections (Minneapolis)
Effective January 1, 2021, Minneapolis Ord. No. 2020-040 (“Ordinance”) creates protections for freelance workers. The Ordinance mandates, among other requirements, that contracts for service worth $600 or more be reduced to writing and paid in a timely manner. Hiring parties that fail to follow the Ordinance’s requirements may be subject to penalties, fines, and damages.
Ban the Box (St. Louis)
As of January 1, 2021, St. Louis Ord. No. 71074 prohibits employers with 10 or more employees in the City of St. Louis from basing job hiring or promotion decisions on an applicant’s criminal history, or inquiring about the applicant’s criminal history until after it has been determined that the applicant is otherwise qualified for the position. However, employers are permitted to use criminal history in hiring and promotion decisions if they can demonstrate the employment-related decision is based on all information available, and the criminal history is reasonably related to, or bears upon, the duties and responsibilities of the position. For more information, please see our recent blog post.
Marijuana
Montana voters approved Ballot Initiative No. 190 (known as “I-190”), which, as of January 1, 2021, legalizes the use and possession of up to one ounce of marijuana by all persons who are at least 21 years old. The Montana Department of Revenue will issue further rules and regulations by October 1, 2021. For a list of additional states that recently passed marijuana-related ballot initiatives, please review our blog post.
Marijuana
New Jersey voters chose to legalize the possession and use of marijuana for recreational use by adults age 21 and older, effective January 1, 2021. Public Question 1 amends the state constitution to legalize marijuana and authorizes the State’s existing Cannabis Regulatory Commission to oversee the new adult marijuana market, but leaves it up to the New Jersey Legislature and local governments to promulgate further rules and regulations. Notably, Public Question 1 is silent with regard to its effect on private employers. Thus, any direct employment implications will arise from subsequent legislation or regulations.
Note: As we previously reported, New Jersey employers may need to provide reasonable accommodations for medical marijuana users.
For a list of additional states that recently passed marijuana-related ballot initiatives, please review our blog post.
Amendment to the Millville Dallas Airmotive Plant Job Loss Notification Act
As previously reported, New Jersey Governor Phil Murphy signed into law an amendment to the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act, commonly referred to as the “NJ WARN Act.” The NJ WARN Act was modified to, among other things, require payment of severance to eligible employees who suffer a NJ WARN Act-covered termination of employment and to require 90 days’ notice of such terminations (the “January 2020 Amendment”). The January 2020 Amendment was scheduled to take effect in July of 2020, but a further amendment was signed into law on April 14, 2020, that has postponed the January 2020 Amendment’s effective date to until 90 days following the termination of the State of Emergency that was declared in Executive Order 103. Consistent with the extension of the current Public Health Emergency (also declared in Executive Order 103, now extended by Executive Order 215), the January 2020 Amendment will not take effect until, at least, May 2021.
New York Paid Sick Leave
Employees began to accrue paid sick leave on September 30, 2020, and, effective January 1, 2021, they became eligible to use their accrued leave. For further details, please see our recent blog post.
New York Paid Family Leave
On January 1, 2021, paid family leave benefits in New York increased from 10 weeks, capped at 60 percent of the statewide average weekly wage, to 12 weeks, capped at 67 percent of the statewide average weekly wage.
Gender-Neutral Single-Occupancy Bathrooms
As discussed in our recent blog post, on December 23, 2020, Governor Andrew Cuomo signed into law Assembly Bill A5240A, amending New York State’s Civil Rights Law and Education Law to make all single-occupancy bathrooms located in public places, including schools, restaurants, bars, and other establishments, gender-neutral. The new law goes into effect on March 23, 2021.
Earned Sick and Safe Time (New York City)
As we previously reported, New York City recently amended its Earned Sick and Safe Time Act (“ESSTA”) to align with the New York State Paid Sick Leave Law as to employer size and income thresholds for determining an employer’s safe and sick leave obligations. As of January 1, 2021, employees can use any additional paid leave time accrued as a result of the ESSTA amendments’ adoption of the State law. The ESSTA amendments also added a requirement that employers provide the amount of each employee’s accrued and used sick and safe leave and the employee’s remaining leave balance on the employee’s pay stubs, or in a separate writing provided to the employee each pay period. Although the disclosure requirement went into effect on September 30, 2020, the City’s Department of Consumer Affairs advised employers through its website that it extended the deadline for compliance without penalty to January 1, 2021.
Ban the Box [2] (New York City)
On January 10, 2021, the New York City Council enacted Int. 1314-A, which becomes effective on or about July 28, 2021. The law expands job applicants’ protections under New York City’s Fair Chance Act (“FCA”), otherwise known as the “ban the box” law. Among other things, the new law (1) expands the scope of FCA protections to include pending arrests and other “criminal accusations,” (2) requires the same FCA protections for current employees as applicants, and (3) prohibits at any time—even after an employer makes a conditional job offer—inquiries related to non-pending arrests and criminal accusations, adjournments in contemplation of dismissal, youthful offender adjudications, and certain sealed convictions.
Decriminalization of Controlled Substances
With the passage of Measure 110, Oregon became the first state to decriminalize the personal, non-commercial possession of small amounts of Schedule I-IV controlled substances, including heroin, cocaine, and methamphetamines. The law will take effect February 1, 2021. Measure 110 is silent with respect to employment, and thus does not currently impose additional obligations on employers.
Independent Contractors
HB 1407, which became effective on January 1, 2021, prohibits misclassification of workers as independent contractors and imposes certain penalties for such misclassification. The law also creates a presumption that a worker is an employee unless either party proves that the worker is an independent contractor based on application of the Internal Revenue Service’s guidelines.
Non-Compete Agreements
SB 480 bans agreements with “low wage” employees entered into on or after July 1, 2020, that restrain, prohibit, or otherwise restrict workers’ ability to compete with former employers after termination of employment.
Virginia also enacted numerous employment-related laws that became effective on July 1, 2020. For more information, please review our Act Now Advisory.
Non-Compete Agreements
On January 1, 2020,but purportedly retroactive, H.B. 1450 (which amended Chapter 49 of the Revised Code of Washington) modified the non-compete law in Washington. Specifically, the 2020 amendments deter overly broad agreements, set income thresholds and an 18-month duration, require mandatory “garden leave,” prohibit out-of-state forum selection clauses, and set disclosure requirements. For more information, please see our blog post on this law. On January 1, 2021, the 2020 income threshold of $100,000 increased to $101,390 for employees, and, for contractors, the 2020 income threshold of $250,000 increased to $253,475.
Payroll Expense Tax (Seattle)
Seattle, via Ordinance No. 126108, established a local payroll expense tax applicable to all employers in the City. The payroll deductions began on January 1, 2021, and are graduated, depending on the amount of the business’s payroll expenses.
Non-Compete Agreements
On January 11, 2021, Mayor Muriel Bowser signed B23-0494, the Ban on Non-Compete Agreements Amendment Act of 2020 (“Act”), which prohibits the use and enforcement of non-compete agreements for all employees except certain highly paid physicians. The Act will go into effect after the expiration of the 30-day congressional review period and publication in the District of Columbia Register.
Exempt Salary Threshold Increases
Except where noted below, effective January 1, 2021, the following states increased their minimum salary thresholds for the administrative, professional, [3] and executive exemptions.
|
Jurisdiction |
2020 Annual Salary |
2021 Annual Salary |
|
Alaska |
$42,390.40 |
$43,014.40 |
|
California (≤ 25 employees) |
$49,920 |
$54,080 |
|
California (≥26 employees) |
$54,080 |
$58,240 |
|
Colorado |
$35,568 |
$40,500.20 |
|
Maine |
$36,000 |
$36,450 |
|
New York (Nassau, Suffolk, Westchester Counties) [4] |
$50,700 |
$54,600 |
|
New York (Outside of New York City and Nassau, Suffolk and Westchester Counties)(effective December 31, 2020) |
$46,020 |
$48,750 |
|
Pennsylvania |
$35,568 |
$40,560 |
|
Washington (≤ 50 employees) |
$35,100 |
$42,712.80 |
|
Washington (≥ 51 employees) |
$35,100 |
$49,831.60 |
****
For more information about this Advisory, please contact:
|
Susan Gross Sholinsky |
Ann Knuckles Mahoney |
Jennifer L. Nutter |
Eduardo J. Quiroga, a Law Clerk – Admission Pending (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this Advisory.
ENDNOTES
[1] This is not an exhaustive list. Employers are encouraged to consult with counsel to ensure compliance with any applicable laws in the jurisdictions and/or industries in which they operate.
[2] As previously reported, effective August 25, 2020, Suffolk County, New York, became the state’s fifth locality to enact a “ban the box” law. Similar measures have been adopted by Buffalo, Rochester, and Westchester County.
[3] New York’s minimum salary threshold applies only to the administrative and executive exemptions—and not the professional exemption. Employers in New York State that rely upon the professional exemption need only comply with the federal salary threshold, and not the increased New York State threshold.
[4] New York City’s salary threshold will remain at $58,500.
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