On 5/18, we sent out an email reminding you of minimum wage requirements that will rise this year. Connecticut took place on June 1. Other updates will take effect in the next few weeks and months. These changes may require payroll updates if you have employees working in those places.

For quick reference:

• Connecticut will increase to $15/hr on 6/1/2023
• Nevada (No Health Benefits Offered) will increase to $11.25/hr on 7/1/2023
• Nevada (Health Benefits offered) will increase to $10.25/hr on 7/1/2023
• Puerto Rico will increase to $9.50/hr on 7/1/2023
• Florida will increase to $12.00/hr on 9/30/2023

Please click the button below for a full list of updates.

Getting Terminations Right

Employee terminations are an important part of the employee life cycle and must be handled carefully to ensure compliance and limit risks. Terminations can occur when the employment relationship no longer works for either the employee or the employer. In any event, when there is a termination, employers must take great care to ensure it is done well. There are steps that you will want to perform every step of the way.

Before the Termination

Documenting the details of the termination is key. This can be part of a progressive discipline process if there were performance issues or misconduct.  It can also be in the form of a resignation letter when the employee voluntarily leaves an organization. Documentation is important to memorialize the reason for termination. You may also want to conduct a stay interview if you’d like to try to keep an employee or an exit interview to gather as many details as possible about an employee’s employment experience. These details can be helpful to improve your organization.

During the Termination

The termination conversation should be conducted in private. A respectful meeting goes a long way and sends a positive message, not only to the terminated employee but to your existing employees as well.  Keep the meeting concise and allow the employee to ask questions. Collect company property and allow for retrieval of the employee’s personal belongings. You may want to consider escorting the employee back to their desk if this is necessary. Depending on the state in which the employee works, you may need to provide the employee with information about unemployment, their final paycheck, or other matters. Click here to see what the requirements are in your state. The PrestigePEO team sends the terminated employee a termination letter detailing COBRA information and other termination details.

After the Termination 

Be sure to log into the PrestigePRO portal to add a termination date, termination reason, and detailed comments when needed. This helps us to respond to unemployment notices timely and accurately.

While there is no one way to prevent a negative outcome after an employee terminates, making sure you terminate the right way will help to limit your exposure to risks. Your HRBP can provide guidance to help you navigate the termination process.

I-9 Verification Remote Flexibility for COVID-19 Is Ending on July 31, 2023

The I-9 verification remote flexibility for COVID-19 ends on July 31, 2023. Under this flexibility, employers taking physical proximity precautions due to COVID-19 could review I-9 documentation remotely.

Because this flexibility ends on July 31, 2023, employers have 30 days after this end date to perform all physical examinations of identity and employment eligibility documents for those employees hired on or after March 20, 2020, who only received a virtual examination under the COVID-19 flexibilities.

How should employers notate Form I-9 during the physical examination of identity and employment eligibility documents?

On Form I-9, in the “Additional Information” field, the person performing the physical inspection should write “Documents physically examined on” and add the date they examined the document. If the person performing the inspection is the same as the one who performed the remote inspection, they can add their initials. If it is a different person, they must add their full name. Ex: “Documents physically examined on 5/25/2023 by Adam Smith.” You may review examples here.

If an employer created a case on E-Verify during the remote inspection at the time of hire, do they need to create another case during the physical inspection?

Employers should not create another E-Verify case or change the one made at the time of hire.

What should employers do if a remote employee cannot meet in person for the physical examination of identity and employment eligibility documents?

Employers may use an authorized representative to complete Form I-9 on their behalf. The Department of Homeland Security does not have specific requirements for who can be an authorized representative, but employers should choose someone they can trust to do the physical examination of the eligibility documents. Employers are still liable for any I-9-related violations if they use an authorized representative.

Prestige is here to help.

In the event that you need a copy of your employee’s Form I-9, and you have it on file with PrestigePRO, you can download it by following these instructions. If you need assistance complying with the Form I-9 requirements or have general questions about verifying employment eligibility, please contact your HR Business Partner.

The EEOC Released Guidelines in Response to the End of the COVID-19 Public Health Emergency Declaration

On May 15, 2023, the EEOC released guidance as a response to the end of the COVID-19 Public Health Emergency Declaration. This guidance reviews proper COVID-19 protocols in the workplace. Some of the highlights include:

(1) Employers may ask employees if they have COVID-19 or are experiencing COVID-19 symptoms when employees call in sick or report feeling sick at work.

(2) If employees are entering the worksite or working in proximity of others, employers can inquire if they have contracted COVID-19, have COVID-19-related symptoms, or have been tested for COVID-19.

(3) Although employers may ask employees coming into the worksite whether they have been near others with COVID-19, they may not ask about family member’s test results as this could initiate a Genetic Information Nondiscrimination Act (GINA) issue. GINA prohibits employers from asking about family medical information.

(4) If employers require a medical examination, such as measuring body temperature or viral testing, they must consider why they need the examinations since it must meet the “business necessity” standard for it to be lawful. Likewise, employers must also consider the “business necessity” standard when asking disability-related questions.

(5) Different types of reasonable accommodations for Long COVID include the use of noise cancellation devices for uninterrupted worktime and to reduce brain fog, flexible work schedules to address fatigue, the removal of “marginal functions” involving physical exertion to avoid the shortness of breath and implementing alternative lighting to address headaches.

(6) The end of the Public Health Emergency does not automatically terminate COVID-19-related reasonable accommodations. But employers may engage in the interactive process to determine if the employee still needs the accommodation or could use an alternative accommodation.

To learn more about EEOC-recommended COVID-19 protocols in the workplace, you may visit the guidance. If you have any questions, please contact your HR Business Partner.

The federal government levies a Federal Unemployment Tax Act (FUTA) tax against employers to maintain the Federal Unemployment Trust Fund (Fund). The federal government then allows states to take loans from the Fund to meet their unemployment benefits liabilities. However, when a state does not repay a loan within the time frame provided by the government, the Internal Revenue Service reduces the Federal Unemployment Tax Act (FUTA) credit it would otherwise give employers who pay wages under that state’s unemployment insurance program. This action is referred to as a FUTA credit reduction. Employers can learn more about FUTA reduction here.

Several states are subject to a FUTA credit reduction for unpaid loans. Those states include New York, Illinois, California, and Connecticut. As a result, clients will see a FUTA tax increase on their invoices for the duration of that state’s outstanding FUTA credit reduction. In addition, Prestige will also be collecting any previously uncollected FUTA taxes from clients in these states to remit to the IRS, as required by law.

Please contact your Payroll Specialist or Human Resources Business Partner if you have any questions or concerns about the FUTA credit reduction.

Employees are typically classified as exempt or non-exempt, but what does that mean? What is the difference between the two? Under the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay if they work over 40 hours per week. In other words, they are not exempt from FLSA’s overtime or federal minimum wage regulations. They are normally paid on an hourly basis. Exempt employees are not entitled to the FLSA’s overtime pay and are usually paid on a salary basis.

What does “salary basis” mean?

This means regularly receiving a predetermined amount of pay each pay period, regardless of how many hours worked, the quantity of work performed, or the quality of work.

Why is it important to correctly classify employees?

Misclassifying employees can be very costly for your organization. Employees can sue to recover unpaid wages and may be entitled to payment of attorney’s fees. Also, improper classification can open the door for the Department of Labor (DOL) or state agencies to audit all of your business’s employee classifications and may result in additional amounts owed, fines, and penalties.

How do you correctly classify exempt and non-exempt employees?

Correctly classifying employees can be tricky. Exempt employees may fall under the executive, administrative, professional, computer employee, or outside sales exemption. To qualify for exempt status, the employee must meet the job duties and pay requirements described below. Please note that the job duty requirement is based on job responsibilities, not job titles. Also, check your state laws since they may influence exempt status classification.

Executive Exemption

To qualify for this exemption, the employee must:

• Be compensated on a salary basis, at least $684/ week;
• Have primary duties that consist of managing the business or a subdivision of the business;
• Customarily and regularly direct at least two full-time employees or their equivalent; and
• Have the authority or significant influence in the decision-making process of hiring, firing, promoting, or causing any other change in the employment status of other employees.

Administrative Exemption

To qualify for this exemption, the employee must:

• Be compensated on a salary basis or fee basis, at least $684/ week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the company or customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption

To qualify for this exemption, the employee must:

• Be compensated on a salary basis or fee basis, at least $684/ week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Computer Professional

To qualify for this exemption, the employee must:

• Be compensated on a salary basis or fee basis, at least $684/week or at least $27.63/hour if paid hourly;
• The employee must be employed as a computer systems analyst, programmer, software engineer, or a similar position;
• The employee’s primary duty must consist of:
  • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
  • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  • The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
  • A combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales

• To qualify for this exemption, the employee must primarily be out in the field, making sales or securing contracts for the business; and the employee must be customarily and regularly engaged away from the employer’s place or places of business.

PrestigePEO is here to help.

If you have questions on classifying employees or are concerned that an employee may have been misclassified, please contact your HR Business Partner. While we will not determine a proper classification on your behalf, we are ready and willing to provide guidance.

Minnesota just passed a law that makes all employee non-compete agreements, signed after July 1st, 2023, void and unenforceable. This law applies to all employees, including independent contractors. The good news is that this restriction does not apply to customer non-solicitation agreements or confidentiality non-disclosure agreements, agreements designed to protect trade secrets or confidential information. There are a couple of exceptions to the non-compete agreement ban: (1) agreements during the sale of a business can still prohibit the seller from conducting a similar business within a reasonable geographic area and reasonable time period; and (2) in preparation for the dissolution of a business, the members may agree to not conduct a similar business within a reasonable geographic area and reasonable time period.

In addition, the law prohibits employers from requiring employees that primarily live and work in Minnesota to sign an agreement that would require them to adjudicate a claim outside of Minnesota, even if the claim arose in Minnesota. Also, employers cannot deprive employees from the protection of Minnesota law for an issue that arose in that state. This applies to all employee agreements, not just non-compete agreements. If you have any questions regarding this new restriction on non-compete agreements, please contact your HR Business Partner.

Effective July 1, 2023, private employers operating in Florida with 25 or more employees must use E-Verify during their onboarding process. Previously, the E-Verify requirement only applied to public employers, contractors, and subcontractors, while private employers were required to either comply with Form I-9 requirements or use E-Verify.

What is E-Verify?

E-Verify is a digital employment eligibility tool that verifies if the newly hired employee is authorized to work in the United States.

To Whom Does This Law Apply?

This requirement applies to Florida private employers with 25 or more employees. Employers with less than 25 employees are encouraged to use E-Verify but are not required to do so. Employers are not required to utilize E-Verify on independent contractors since they are not considered employees.

Moving Forward: What Are Employers Required to Do?

Florida private employers should update their onboarding process, if necessary, to incorporate the new E-Verify requirement in conjunction with Form I-9 in anticipation of the July 1, 2023, deadline. Employers must verify employment eligibility within three business days of the new hire’s start date.

Record-Keeping Requirements and Certification

Employers must maintain a copy of the documentation provided for Form I-9 and E-Verify and any official verification for three years after the employee’s start date.

Penalties

Beginning July 1, 2024, if the Florida Department of Economic Opportunity (DEO) finds that an employer has knowingly hired someone who is not authorized and did not verify the employee’s employment eligibility, the DEO can impose civil penalties on the employer, including the repayment of any economic development incentive and the DEO will put the employer on probation for one year, requiring the employer to demonstrate compliance every quarter. In addition, if another violation occurs within 24 months, the DEO is authorized to suspend or revoke all Florida-issued licenses.

Additionally, if the DEO finds that an employer failed to use the E-Verify system, it will notify the employer and give them 30 days to rectify the non-compliance. If the DEO finds that the employer has not used the E-Verify system 3 times within a 24-month period, the DEO can fine the employer $1,000 per day until the employer provides proof that it has rectified the non-compliance.

PrestigePEO Is Here to Help.

PrestigePEO can help provide the tools to protect your business. Please contact your HR Business Partner if you have additional questions regarding E-Verify or are interested in learning more about how PrestigePEO can assist with the E-Verify process.

Virginia recently amended Virginia Code § 40.1-28.01, restricting employers from requiring “employees or prospective employees to execute or renew any provisions in a non-disclosure or confidentiality agreement that has the purpose of or effect of concealing the details relating to “sexual assualt claims “as a condition of employment”. Agreements with these provisions will be deemed void and unenforceable. This law will go into effect on July 1, 2023.

If you are a Virginia employer and use non-disclosure or confidentiality agreements, please make sure these agreements comply with the updated law. If you have any questions, please contact your HR Business Partner.

The U.S. Department of Labor (DOL) released a mandatory updated FLSA poster reflecting recent changes regarding break time under the Provide Urgent Maternal Protections for Nursing Mothers (PUMP) Act. In addition, this June, the EEOC will release a mandatory updated “Know Your Rights” poster addressing the Pregnant Workers Fairness Act (PWFA). This law requires accommodations for known limitations related to pregnancy, childbirth, or related medical conditions unless it causes an undue hardship on the business. Finally, the DOL released an updated FMLA poster; this version is not mandatory to post.

We are waiting for the EEOC to release the updated “Know Your Rights” poster this June. Once it is released, we will provide you with a federal poster containing all three changes. As a temporary compliance solution, please display and send remote workers the updated FLSA poster until you receive the all-in-one poster. If you have any questions, please contact your HR Business Partner.

In recent years, diversity training has become an important topic in the workplace. As it covers gender, age, and ethnicity, you may wonder why including additional training on LGBTQ+ inclusivity is necessary. To some, these topics may seem commonplace, but it is crucial to make sure that everyone in your company feels heard, valued, and respected. You never know where the best talent is going to come from, and employees need to feel safe to work at their highest capacity. In honor of Pride Month, we are recognizing the importance of an LGBTQ+ inclusive workplace and offering suggestions on how you can accomplish this in your office.