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By run-ADP

States and local jurisdictions enact laws impacting how employers hire, pay, and manage their employees. In January, we identified several employment trends to watch in 2018. Now is a good time to reflect on these trends and to assess whether evolving rules will impact your business. Below we address recent developments in three major employment areas: minimum wage, sick leave, and pay equity.

#1: Minimum Wage Increases

Some of the jurisdictions that increased their minimum wage rates effective July 1, 2018, include:

Maryland
$10.10 per hour

Oregon
$10.50, $10.75, or $12.00 per hour depending on region

District of Columbia
$13.25 per hour

Chicago
$12.00 per hour

San Francisco
$15.00 per hour

Los Angeles
$12.00 or $13.25 depending on employer size

Minneapolis
$10.25 or $11.25 depending on employer size

Montgomery County, Maryland
$12.00 or $12.25 per hour depending on employer size

Cook County, Illinois
$11.00 per hour unless the employee works in a municipality that has opted out of the requirement

Several smaller localities also increased their minimum wage rates on July 1. Additionally, there were a number of minimum increases that took effect at the beginning of 2018.

Keep in mind that in some cases, an increase in the minimum wage can also affect the minimum cash wage for tipped employees and the minimum salary requirements for exempt employees. Check your applicable law and pay all non-exempt employees at least the applicable minimum wage. If an employee is subject to more than one minimum wage rate, the highest rate generally applies.

#2: Paid Sick Leave Laws

In 2018, Maryland, New Jersey, Austin (TX), and Duluth (MN) joined the growing list of states and local jurisdictions that have enacted laws requiring employers to provide paid sick leave to employees. Additionally, Rhode Island’s requirement took effect on July 1, 2018.
Currently, the following jurisdictions require (or will soon require) employers to provide paid sick leave to employees. Note that some of these laws permit small employers (as defined by each law) to provide unpaid sick leave.

States:
Washington, Oregon, California, Arizona, Vermont, Massachusetts, Connecticut, Rhode Island, New Jersey and Maryland (employers with more than 50 employees must provide paid sick leave to “service employees”)

Other Jurisdictions:

Austin, Texas (effective October 1, 2018; employers with less than six employees have until October 1, 2020 to comply)

Chicago

Cook County, Illinois

District of Columbia

Cities in New Jersey: Bloomfield, Elizabeth, East Orange, Irvington, Jersey City, Montclair, Morristown, Newark, New Brunswick, Passaic, Paterson, Plainfield, and Trenton. These laws will be preempted by New Jersey state law once it takes effect on October 29, 2018.

Cities in California: Berkeley, Emeryville, Oakland, San Francisco, Santa Monica, San Diego, Long Beach (hotels with 100 or more rooms), and Los Angeles

Cities in Washington: Seattle, Tacoma, and SeaTac (hospitality and transportation industries)

Cities in Minnesota: Duluth (effective January 1, 2020), Minneapolis, and St. Paul

Montgomery County, Maryland

New York City

Philadelphia

These laws typically include provisions that set minimum standards for who is eligible for the leave, how much leave employees are entitled to, the reasons employees may take leave, and whether leave carries over from year to year. If your employees are covered by one of these laws, make sure you are providing sick leave in accordance with the law.

#3: Pay Equity & Restrictions on Salary Inquiries

Pay Equity:

Recently, several states have enacted or expanded laws prohibiting pay discrimination, including but not limited to New Jersey (effective July 1, 2018), Massachusetts (effective July 1, 2018), and Washington (effective June 7, 2018). New Jersey’s law, for example, prohibits employers from paying an employee who is a “member of a protected class” less than employees who are not members of the protected class for substantially similar work. The new law also clarifies what constitutes unlawful pay discrimination.

Be sure that your pay practices do not intentionally or unintentionally discriminate against employees on the basis of sex or other protections. Here are some additional best practices for ensuring pay equity:

Conduct internal audits. Consider working with legal counsel to conduct an internal audit of pay practices to confirm that employees working in similar positions are paid equitably based on skill, merit, and other nondiscriminatory factors.

Examine policies and procedures. Review pay-related policies and procedures to ensure compliance with all applicable laws. Develop a clear written equal employment opportunity policy and include a complaint process for employees to raise concerns.

Train supervisors. Provide training on the company’s compensation-related policies and procedures and commitment to equal pay.
Consider pay transparency. Clearly communicate how the company determines employees’ compensation.

Promptly respond to all complaints. Take all complaints seriously and conduct a prompt, impartial, and thorough investigation.
Document. Confirm employment decisions are made for legitimate, nondiscriminatory reasons and properly document all pay and performance-related decisions.

Restrictions on Salary History Inquiries:

In recent weeks, Vermont and Connecticut joined the growing list of jurisdictions enacting restrictions on pay history inquiries. These laws generally prohibit employers from asking about an applicant’s salary history since their pay history may reflect discriminatory pay practices of a previous employer. This information could then result in lower wages in the new job.

To date, the following jurisdictions have enacted restrictions on salary history inquiries:

California
January 1, 2018

Connecticut
January 1, 2019

Delaware
December 14, 2017

Massachusetts
July 1, 2018

Oregon
October 6, 2017

Vermont
July 1, 2018

Albany County (NY)
December 17, 2017

Westchester County (NY)
July 9, 2018

New York City
October 31, 2017

San Francisco
July 1, 2018

* Philadelphia’s pay history ban was partially blocked by a federal judge. Employers can ask about salary history, but cannot rely on the information when making employment decisions. Covered employers should continue to monitor the status of the law.

If you are subject to one of these laws, remove salary history questions from application forms and train supervisors and hiring managers to avoid these questions during the pre-employment process, including interviews and reference checks. Note: HR411®’s sample employment application form no longer includes questions about pay history.

Conclusion:

These are just a few of the legislative trends affecting employers in 2018. Make sure you understand all of the laws that apply to your employees and regularly review workplace forms, policies, practices, and training to ensure compliance.

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