Labor Law Changes in 2020: What You Need to Know

May 5, 2020Blog0 comments

The workplace has changed dramatically.  And the government is catching up with demographic, as well as economic shifts that affect labor law, especially at the state and local government level.  

The U.S. Department of Labor (DOL) went to recent changes that most business owners should be aware of when employing. Here is a list of the most notable labor law changes in 2020. 

New Overtime Rule

The DOL recently issues its anticipated federal overtime rule. Under the rule, employers have to pay workers that make less than $35,568 overtime premiums. Approximately 1.3 million American workers are eligible for overtime pay. The rule allows business owners to count a portion of certain bonuses/commissions towards meeting the salary level. 

Another change to the federal Fair Labor Standards Act’s (FLSA’s) includes a raise to salary cutoffs of highly compensated employees. Many business owners have been patiently awaiting the new overtime rule. 

Expansion of Apprenticeship Programs 

In Junes, the DOL proposed a ruled to expand apprenticeship programs to promote closing the skills gap. The rule, if approved, would create a process to establish industry-recognized apprenticeship programs (RAPSs). Those programs are customizable and considered major milestones in “the continuing effort to expand apprenticeships in the United States.” 

The apprenticeship programs would be available to industry groups, schools, and nonprofits. The programs would be mostly free from regulatory oversight, but would not change any requirements of the current DOL apprenticeship programs. 

Change in Tip-Sharing Rules 

A most notable change that business owners will also have to grasp is about tip sharing. Under the FLSA, the proposal would make it easy for employers to require workers such as servers and bartenders, to share their gratuities with cooks, dishwashers, and other “back-of-the-house” workers. Under such rules, employers are prohibited from keeping employee’s tips.  

Update of Fluctuating Workweek Rules 

The DOL is also working on some updates to the fluctuating workweek method of calculating overtime. Employers can use the new method under the FLSA to calculate overtime pay for nonexempt workers who report varying hours each week. 

Update of “Regular Rate” Calculation 

Another change under the FLSA includes a change of definition of the “regular rate” of pay. The regular rate, which is used to calculate overtime premiums, excludes health insurance, paid leave, holiday bonuses, and other bonuses, including gifts. 

Many employers aren’t sure what counts as a perk to be included in the regular rate of pay. So instead of risking a lawsuit, many are choosing not to offer competitive benefits. This option makes employers make feel more comfortable offering additional rewards if the proposed change is finalized. 

California Assembly Bill 5  

In California, the bill commonly referred to as AB5 will require companies to reclassify independent contractors as employees. This means that business owners can offer these new employees health benefits, workers’ compensation insurance, and paid time off. The legislation is meant to protect gig economy workers, two million of whom currently live in California. 

But, what exactly does this bill really mean for small businesses that work with contractors? First, the bill makes it easy for highly qualified workers to receive protections such as termination unemployment and eligibility for overtime pay. 

A lot of people that didn’t receive the protections and benefits above are now entitled to them. Secondly, the bill means that many gig employers need to lawyer up and determine whether your workers are correctly classified as independent contractors. 

If you need to reclassify an independent worker to an employee, make sure you’ve told them to do the following: 

  • Complete an employment application 
  • Undergo a background check 
  • Complete an I-9 and a W-4 
  • Enroll in your employee benefits program 

Lastly, figure out how you will pay for reclassifications if such cases arise. While large companies might be able to handle the cost of increased wages, small businesses might struggle. The latter needs to plan with anticipation. 

More State Labor Law Changes 

Other mandatory updates to labor posters have businesses across the nation checking up to make sure they’re compliant. Some notable state labor law information by state includes: 

Washington’s Paid Family and Medical Leave 

Washington is the fifth state to enact legislation that lets eligible employees ask to take up to 18 weeks of paid family and medical leave per year. The District of Columbia and Massachusetts are known to follow suit too. 

Oregon’s Employer Accommodation For Pregnancy Act 

The act, known as House Bill 2341, will require that all organizations with more than six employees must provide reasonable accommodation for people with workplace limitations.

As well as medical conditions related to pregnancy or childbirth. Such accommodations can include modifications of assignments, equipment, or schedule. 

Nevada Assembly Bill 132 

Nevada is the first state to prohibit employers from refusing to hire candidates for resting positive for marijuana in screening tests. Only workers whose use of the substance could put the sate of others at risk are still accountable for testing positive in such tests. The bill is meant to combat employee discrimination in a state where medical and recreational marijuana are legal.

Other cities and states like Oklahoma and New Jersey are now considering to amend their legislation. 

How to Get Ready as An Employer 

As an employer, it’s important to stay up to date with the newest labor law changes. Although things like worker’s compensation won’t necessarily protect employers from all employee lawsuits, offering proper compensation insurance can lessen the damage. If you think you could deal with compensation claims soon, contact us today for more information. 

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