In wake of recent legislation aimed at increasing employee rights and safeguards, the Pennsylvania legislature has promulgated new wage and hour regulations restricting employers and providing greater protections for employees. The new wage and hour regulations are effective on August 5, 2022. The new regulations impact two categories of employees: (1) tipped employees; and (2) salaried employees with a fluctuating workweek schedule.
Recently, we issued an alert explaining that, on July 19, 2022, the Michigan Court of Claims ruled that the “adopt-and-amend” strategy the Michigan Legislature used in 2019 to enact more business-friendly minimum wage and paid sick time laws was unconstitutional. The court also reinstituted the prior versions of these laws which meant Michigan employers were immediately subject to the more generous Earned Sick Time Act and the higher $12 per hour minimum wage for most employees.
However, on July 29, 2022, the same court issued a stay of its ruling through February 19, 2023 to allow employers and the relevant state agencies time to comply with and enforce the original, reinstituted laws. Accordingly, as of the writing of this alert, employers have until February 19, 2023 to comply with the Earned Sick Time Act (which requires more paid sick time than the now-stricken Michigan Paid Medical Leave Act) and provide at least a $12 per hour minimum wage for non-tipped employees, unless an appellate court or the Michigan Legislature acts before February 19.
In June 2021, the Illinois Equal Pay Act (IEPA) was amended to add a requirement for certain Illinois businesses to obtain an equal pay registration certificate (EPRC). The Illinois Department of Labor (IDOL) issued its long awaited proposed rules regarding the EPRC requirements on May 20, 2022. The proposed rules are subject to a 45-day comment period, which has now passed, followed by an internal review, and a public hearing on August 9, which may result in additional changes before they become final.
However, some Illinois employers have already received notice of a deadline to file their Application for Certification before the rules are finalized. Therefore, a careful review of the proposed rules is helpful as we anticipate issuance of the final rules. While the proposed rules largely mirror statutory requirements (the basics which were laid out in prior posts here and here), IDOL has clarified or provided additional information on a number of topics.
On July 19, 2022, the Michigan Court of Claims ruled that the “adopt-and-amend” strategy the Michigan Legislature used in 2019 to enact minimum wage and paid sick time laws was unconstitutional. Those laws were regarded as more favorable to businesses, but they amended and substantially differed from the voter-initiated laws the Legislature adopted earlier in the same legislative session. For example, the amended laws reduced the increase of the minimum wage from $12 to $10.10 per hour, lowered the required amount of paid sick time from 72 to 40 hours, exempted employers with fewer than 50 employees, and exempted certain employees, such as executive, administrative, professional and outside sales employees. Part-time employees who worked an average of fewer than 25 hours per week were also exempted from the paid sick leave law. The laws are known as the Earned Sick Time Act (ESTA), which the Legislature amended and renamed the Michigan Paid Medical Leave Act (MPMLA), and the Improved Workforce Opportunity Wage Act (IWOWA), which was amended under the same name.
According to the court, the Michigan Legislature has only three options in response to a proposed law initiated by voters: (a) adopt the initiative as presented, (b) reject the petition, or (c) propose an alternative law. The Michigan constitution does not permit the tactic used by the Legislature to amend the voter-initiated laws which, in the court’s review, “effectively thwarted the intent of the People.” As a result, the laws that have governed Michigan employers since 2019 have been “voided,” and the original voter-initiated laws are effective immediately.
Leave Benefits for Adoption: Alabama’s Adoption Promotion Act (the Act) takes effect on July 1, 2022 and requires employers with 50 or more employees to provide eligible employees with up to 12 weeks of unpaid family leave for the birth or adoption of a child. The Act also mandates that employers who provide paid leave benefits and additional leave considerations for the birth of a child provide similar benefits for adoption.
Marketplace Contractors: Effective July 1, 2022, marketplace contractors are not considered employees under workers’ compensation and unemployment insurance laws (if certain conditions are met). Marketplace contractors are persons/entities who enter into agreements with marketplace platforms to be connected with third parties seeking services — such as drivers for Uber and Lyft.
Expansion of Employer Definition under Sexual Harassment Discrimination: Arizona enacted a change to the sexual harassment provisions of existing employment discrimination law, so that the law applies to any employers or their agents who commit sexual harassment or retaliate against someone for reporting it.
On May 23, 2022, the California Supreme Court ruled in Naranjo v. Spectrum Security Services, Inc. that unpaid meal and rest period premiums can form the basis of claims for wage statement violations under California Labor Code section 226 and waiting time penalties under California Labor Code section 203. This is yet another significant decision by the Supreme Court impacting California employers in California particularly since the Court overruled the Court of Appeal, which had held that meal and rest period premiums are not “wages” and therefore cannot lead to wage statement or waiting time penalties.
California law generally requires that employers provide non-exempt employees a reasonable opportunity to take an unpaid, off-duty and uninterrupted meal period of at least 30 minutes before the end of their fifth hour of work, and a second meal period before the end of their tenth hour of work. Employers also generally must provide 10-minute uninterrupted, paid rest periods to non-exempt employees for every four hours worked (or major fraction thereof). If an employer does not provide a compliant meal or rest period, the employee in question is entitled to payment of one hour of wages at the employee’s regular rate of pay. That extra hour of pay is often referred to as a meal or rest period “premium.”