Heatwaves and Regulations: May's Compliance Forecast

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With summer on the horizon and vacations looming, May offers an optimal window to stay updated on the latest compliance shifts shaping the employment sphere. Let’s ensure you’re well-prepared and equipped to handle the forthcoming changes. 

Check out our Compliance podcast on these updates at Two-Minute Tuesday Tip: Keeping Up with May Compliance Changes.

 

Legislation: What’s New and What’s Next? 

Canada: Prince Edward Island Paid Sick Leave

Effective October 1, 2024, updates have been made to Prince Edward Island’s Employment Standards Act.

Currently, Edward Island workers with five years of continuous service are entitled to one day of paid sick leave and up to three days of unpaid sick leave each calendar year. As of October 1, 2024, in addition to the unpaid leave currently available, employees will be entitled to:

  • One day of paid sick leave after 12 months of continuous employment
  • Two days of paid sick leave after 24 months of continuous employment
  • Three days of paid sick leave after 36 months of continuous employment

Paid sick leave entitlement is the regular rate of wages for hours the employee would have worked had they not requested the leave, or for salaried employees – their regular rate of pay for a day of work.

California: Fast Food Minimum Wage Impact on Manager Salary 

The California Labor Commissioner recently issued an FAQ related to the increase in the fast food worker minimum wage. It confirms that the minimum overtime exempt salary for exempt managers in fast food restaurants should increase as the result of the minimum wage increase. As stated in the FAQ document:

“Under California law, to qualify as an 'exempt employee' for wage and hour purposes, you must receive a salary of at least two times the state minimum wage for someone working 40 hours a week and meet other specific requirements. If your salary is less than $83,200 as a fast food restaurant employee starting on April 1, 2024, you are not an exempt employee."

Minimum Wage Updates
Bellingham, Washington 

Effective May 1, 2024, Bellingham, Washington, implemented a new minimum wage rate, as mandated by a ballot measure approved by voters in November 2023.

The hourly minimum wage in Bellingham will be $17.28. This local minimum wage law sets the wage at $1 above the state minimum wage from May 1, 2024, to April 30, 2025, and at $2 above the minimum wage starting May 1, 2025, under Bellingham's municipal code.

Emeryville, California 

Effective July 1, 2024, minimum wage in Emeryville, California will increase to $19.36 per hour.

Fremont, California 

Effective July 1, 2024, the local minimum wage for eligible employers increases to $17.30 per hour. 

San Francisco, California

Effective July 1, 2024, the minimum wage in San Francisco will rise to $18.67, as stipulated in Article 1.4 of the San Francisco Labor and Employment Code. This adjustment aligns with the annual fluctuations in the Consumer Price Index, ensuring the wage rate remains in step with economic changes.

Washington, DC 

Effective July 1, 2024, Washington, DC will update its minimum wage from $17.00 to $17.50. The base minimum wage for tipped employees will increase from $8.00 to $10.00 per hour. 

New York: Prenatal Paid Leave

On April 19, 2024, New York became the first state to pass a standalone requirement for prenatal paid leave. Effective January 1, 2025, employers must provide 20 hours of paid prenatal leave in a 52-week period, which is in addition to paid sick and safe leave and paid family leave in New York. 

Washington State: Healthcare Overtime Requirements

Washington updated the type of health-care facility employees who are exempt from mandatory overtime, under a bill that will go into effect for most facilities on January 1, 2025.

Currently, health-care facilities are prohibited from requiring certain employees to work overtime, under state law. The prohibition applies to employees who are involved in direct patient care or clinical services, receive an hourly wage, or are covered under a collective bargaining agreement, and are specified medical specialists.

Under the updated law, HB 2061 removes the requirement that employees must be specified medical specialists. As a result, employees will not be required to work overtime as long as they are involved in direct patient care or clinical services and receive an hourly wage or are covered under a collective bargaining agreement.

West Virginia: Unemployment Filing

West Virginia will be requiring the county field to be included in unemployment files beginning in the second quarter. Customers should add the county to their locations for any West Virginia employees and assign the location based on the county that the employee performs the majority of their duties in. 

U.S. Federal Fast Facts 

Federal Overtime Salary Rules

Effective July 1, 2024, the Department of Labor (DOL) finalized new overtime rules expanding overtime eligibility to an estimated 4 million employees.

The new standard salary level for the Executive, Administrative, and Professional (EAP) exemption increases are:

  • $35,568 ($684 per week), currently
  • $43,888 ($844 per week), effective July 1, 2024
  • $58,656 ($1,128 per week), effective January 1, 2025

The new Highly Compensated Employee (HCE) compensation increases are:

  • $107,432 per year, currently
  • $132,964 per year, effective July 1, 2024
  • $151,164 per year, effective January 1, 2025

The standard salary level amounts are included in the HCE amounts.

The salary and HCE compensation thresholds will be regularly updated every three years beginning July 1, 2027. The DOL predicts the new rule will generate about $803 million in employer compliance costs over the first 10 years. The final overtime rule does not apply to U.S. territories.

For updated FAQs and information, visit the DOL website. 

Federal Trade Commission (FTC) Rules on Non-Compete Agreements 

The FTC released a long-awaited final rule in April on non-compete agreements. For employees other than senior executives, the FTC rule makes existing non-compete agreements unenforceable and requires employers to provide written notice to employees that their non-compete clauses will not be enforced against them. For executives, employers may continue to enforce existing non-competes, but may not enter into new non-compete agreements.

The final rule will likely be challenged in court, and employers should review any existing non-competes and their legal obligations with counsel.

For more information on this ruling, visit the FTC website. 

Future Updates to EEO Data Gathering

The Office of Management and Budget (OMB) has released updated standards that will require federal agencies to gather additional data on race and ethnicity, including:

  • Using one combined question for race and ethnicity and encouraging respondents to select as many options that apply to how they identify.
  • Adding Middle Eastern or North African as a new minimum category. The new set of minimum race and ethnicity categories will include: American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, Middle Eastern or North African, Native Hawaiian or Pacific Islander, and White.

We expect that the Equal Employment Opportunity Commission (EEOC) will make corresponding changes to the EEO-1 Voluntary Self-Identification form, but this process will likely take significant time. The OMB will not require federal agencies to comply with the new requirements until March 2029, although the EEOC may act earlier.