Countdown to 2020: Five Hot Compliance Tips to Keep HR Professionals Out of Hot Water

It is time to make sure you are ready for 2020 (and beyond). Here are five (5) hot HR compliance issues you should be tracking and implementing:

  1. New Salary Thresholds for Exempt Employees under the Fair Labor Standards Act

Effective January 1, 2020, the standard minimum salary levels for exempt executive, administrative and professional employees will increase from the current $455 per week to $684 per week (which equates to $35,568 annually). The minimum annual salary for the highly compensated employee exemption is increasing from the current $100,000 to $107,432. The exemption for certain computer employees remains $27.63 per hour if the employee is paid on an hourly basis.

Employers may satisfy up to 10% of the standard salary levels by paying nondiscretionary bonuses and incentive payments (including commissions) at least annually. There also is a special catch-up provision that allows employees to make a catch-up payment up to 10% of the minimum standard salary level within one pay period following the end of the 52-week period.

HR professionals must identify impacted employees and make any necessary adjustments, effective no later than January 1, 2020, if they choose to retain the employee’s exempt status.  HR professionals also must keep in mind that some states have higher salary thresholds and/or different tests for exempt employees.

  1. Salary History Bans

More and more states, counties and cities are enacting bans to prohibit employers from demanding an applicant’s wage history, at least as part of the initial application process, and/or from retaliating against applicants who refuse to provide wage history. Indeed, Illinois and Alabama enacted laws effective September 2019 and New York and New Jersey have laws going into effect in January 2020.

Specific prohibitions vary depending on the particular law or ordinance. Keeping this in mind, as well as the growing trend to limit employers’ inquiries on wage history, HR professionals should review their applications, interview protocols, recruiter guidelines, and reference check practices to ensure that their companies are complying with applicable laws and ordinances.

  1. Independent Contractor Status

Determining who is properly classified as an independent contractor versus an employee never has been easy. There is a multitude of different federal and state tests, and these tests continue to evolve. For example, earlier this year the National Relations Relations Board established an employer-friendly test in SuperShuttle DFW, Inc., 367 NLRB No. 75 (Jan. 25, 2019). California, on the other hand, recently enacted a new law (Assembly Bill 5), effective January 1, 2020, that severely restricts an employer’s ability to classify an individual as an independent contractor.

Given this ever-changing area of the law, HR professionals must carefully audit who they classify as an independent contractor and evaluate what tests may apply to those individuals. Decisions may need to be made to change the status of independent contractors to employees in some instances, and employers must plan how to roll out the changes and assess the consequences of any such changes.

  1. Medical and Recreational Marijuana

Another hot topic for HR professionals is the trend toward state legalization of medical, and sometimes recreational, marijuana and its impact on the workplace. Now ten (10) states and the District of Columbia allow both medical and recreational use of marijuana, and Illinois will become the 11th state, effective January 1, 2020. Other states have introduced bills in 2019 for medical and/or recreational use of marijuana, and some of these remain pending. On the local level, effective May 10, 2020, New York City will ban covered employers from testing applicants for most jobs for the presence of THC or marijuana as a condition of employment. Meanwhile, marijuana use continues to remain unlawful under federal law.

This growing trends of state legalization of marijuana and increased protections for employees who test positive for marijuana require employers to closely monitor legal developments and their own drug testing and employment practices. Specifically, employers should review their substance abuse policies, and focus efforts on identifying and prohibiting impairment on the job as a result of legal drug use. Managers and supervisors must be trained on recognizing symptoms of possible impairment and what actions they can and should take in response. HR professionals also should evaluate their pre-employment and employment drug testing policies and determine if and when it remains appropriate to test for marijuana.

  1. Paid Sick Leave and Family and Medical Leave Laws

It is important not to drop the ball on tracking the implementation of paid sick leave laws and paid family and medical leave laws. Increasingly, states, counties, and cities have enacted paid leave laws ranging from paid leave to be used for any reason the employee chooses, to paid sick and safe leave laws, to paid family and medical leave laws. The complexity of identifying and complying with this growing body of law will continue to increase.

For instance, effective January 1, 2020, Nevada imposes a paid leave law, in which leave can be used for any reason. Massachusetts has put a paid family and medical leave law in place, with employer obligations commencing October 1, 2019, and benefits become available for use in January and July 2021. Other states (and some counties) are adding benefits to existing laws. For example, paid benefits under New York law increase in 2020 and again in 2021, and California is expanding its paid leave to cover military family needs beginning in January 2021. In light of these changes, HR professionals must continually evaluate their paid leave programs and be on the lookout for new laws impacting existing policies.

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About HR Headaches
HR Headaches is a blog for Human Resources professionals, business owners, and in-house counsel to get the latest news, analysis and tips in the area of labor and employment law. Every day there are new court decisions, agency interpretations, and regulations which affect the workplace, making it difficult, if not impossible, for many employers to keep current. HR Headaches is dedicated to providing information in a practical, no-nonsense manner to help employers avoid legal disputes and keep policies up to date.
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