As the dust settles on the 2024 elections, employers must prepare for significant shifts in wage policies and employee benefits. Several states approved key ballot measures directly affecting wage policies and labor costs of paid sick leave, minimum wage, and tipped worker pay. For example, Missouri and Alaska voters approved paid sick leave and minimum wage increases. Below are the highlights of significant developments.

Paid Sick Leave Expansion

Alaska, Missouri, and Nebraska voters overwhelmingly approved ballot measures mandating paid sick leave for employees. In 2025, Missouri and Nebraska will begin accruing paid sick leave with hourly requirements like those of Alaska. Missouri and Alaska employers must provide up to 56 hours of paid sick leave annually for workplaces with 15+ employees and up to 40 hours for smaller employers. Nebraska employers with 20+ employees can earn up to 56 hours of paid sick leave annually, with smaller employers required to provide up to 40 hours.

Minimum Wage Increases

Two states approved increases to the minimum wage, which will be phased in over the next few years. Alaska’s minimum wage will rise to $15.00/hour by mid-2027. Missouri’s minimum wage will reach $13.75/hour in 2025 and $15.00/hour in 2026. By contrast, California’s proposed minimum wage hike failed to gain voter support, maintaining the state’s existing wage structure.

Tipped Worker Pay

Proposals to alter tipped wage structures faced challenges this election cycle. Voters in Arizona and Massachusetts rejected measures that would have amended tipped worker pay policies. For instance, Arizona sought to lower the tipped wage floor further, while Massachusetts aimed to bring tipped workers’ pay in line with the state minimum wage over time. Both measures were defeated.

Broader Implications for Employers

These state-level changes underscore the evolving landscape of employment law. Employers in these states must prepare to update payroll systems, revise employee handbooks, and ensure compliance with these new laws.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.

In November 2024, Alaskan voters approved two measures to improve employee compensation and benefits. All employers will have to pay a minimum wage of $13.00/hr. starting on July 1, 2025, with the minimum wage incrementally increasing each year until 2027. All employers will also have to offer paid sick leave to employees effective July 1, 2025, at an accrual rate of 1 hour for every 30 hours worked. This provision follows many other states paid sick leave laws we have tracked over the past several years.

Employers with less than 15 employees can cap accrual and use of paid sick leave at 40 hours of sick leave per year. Employer with 15 or more employees can cap accrual and use at 56 hours of sick leave per year. As with other states, paid sick leave can be used for several reasons: the employee’s own personal illness, diagnosis, and treatment, to take care of a qualified family member’s illness, diagnosis, and treatment, or to obtain assistance and care for domestic violence, sexual assault, or stalking.

While the law does not go into effect until mid-summer, it is always a good idea to plan ahead if you have employees in Alaska or plan on hiring any employees in Alaska.

PrestigePEO is here to help and will continue to monitor for any additional guidance provided by the State of Alaska as we draw nearer to the effective date.

A recent Colorado Supreme Court ruling will significantly alter the way overtime rates are calculated, as it now includes holiday incentive pay as “regular rate of pay” for these purposes.  This difference will distinguish the Colorado Minimum Wage Order (COMPS Order 39) from the holiday pay provision provided by the Federal Fair Labor Standards Act (FLSA) wherein any “extra compensation” paid to workers for working on holidays can be excluded from being counted towards the regular rate of pay calculation as long as it was time and one-half or more of the regular rate of pay, and otherwise considered an “overtime premium.”

In Hamilton v. Amazon.com Services, LLC, a worker filed a class action lawsuit claiming overtime violations, for failure to pay overtime for hours worked during weeks wherein they had also worked on a company holiday.  After a dismissal at the federal district court level, the Tenth Circuit Court of Appeals certified the issue for the Colorado Supreme Court to decide, specifically “[w]hether Colorado law includes or excludes holiday incentive pay from the calculation of “regular rate of pay” under the COMPS order.”

The Court found that the holiday incentive pay does in fact fall under the provisions of “all compensation paid to an employee” as per the Colorado COMPS Order, because the incentive pay was provided to the workers for the time worked on a company holiday.  This incentivized payment of wages was essentially a shift differential provided to employees for work done during untraditional, less desirable shifts, therefore should be considered as a part of the total amount an employee is paid for all hours worked, during the employer’s pre-determined seven-day period. This Colorado ruling is a more aggressive approach to the payment requirements surrounding overtime, than that of the FLSA.

It is important to note the distinction between the terms holiday incentive pay and holiday pay for purposes of determining payment obligations.  Under the COMPS Order, holiday pay is pay for non-work hours on holidays, whereas holiday incentive pay accounts for wages paid to workers that is more than regular rates of pay and should be included for overtime purposes. Employers are encouraged to review their polices to ensure compliance with the Colorado COMPS Order as well as all other local, state, and federal wage and hour payment requirements.

PrestigePEO is here to help and is focused on supporting your business. Your HR Business Partner will be happy to assist you with any updates your business may need. Please reach out with any questions you may have.

On November 8, 2024, the Wage and Hour Division of the Department of Labor issued an opinion clarifying that the use of leave under the Family and Medical Leave Act for eligible employees participating in clinical trials for treatment of serious medical conditions is permitted.  The DOL affirmed the permitted use of the FMLA protected leave benefit to include clinical intervention trials, and outlines that the treatment is covered regardless of whether the trials are experimental in nature or involve placebos.

Key take aways from this opinion letter include:

• Employees who otherwise meet all other FMLA eligibility criteria may take leave for clinical trial purposes.
• The term “treatment” is defined very broadly by the FMLA, including those clinical trials that may or may not be effective in every case.
• The optional, voluntary, or elective nature of the treatment is not allowed to be a factor in determining the validity or permissibility of an employee’s request to take FMLA leave.
• Employers are precluded from asking about the effectiveness of a treatment, inquiring about specific medications prescribed, or any details of the treatment plan in evaluating eligibility under FMLA leave. The certification process remains the same, leaving employers permitted to only verify that an employee has a serious health condition that requires a health care provider’s treatment when responding to leave requests.

As a reminder, many state laws follow the FMLA leave entitlement provisions and will also need to be considered.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.

PrestigePEO is focused on supporting your business and will continue to monitor and provide updates as additional information becomes available.

As employers in Maine begin to prepare for the May 1, 2026, benefits start date for the new Paid Family Medical Leave requirement, further guidance is expected from Maine’s Department of Labor by January 1, 2025, as the rules for employers become formalized at the state level.

Background:

In July 2023, Maine’s Governor Mills signed the state budget into law that included provisions for the creation of the Paid Family and Medical Leave (PFML) law.  This new regulation will provide up to twelve (12) weeks of paid leave per benefit year for family, military, medical, or safe leave and will apply to all employers and employees in the state of Maine, except federal government employees.

Payroll withholdings are required to begin on January 1, 2025 and employers are required to begin their first quarterly wage reporting and premium payments starting April 1, 2025 and with payment due by April 30, 2025.  Benefits are scheduled to become available to employees on May 1, 2026.

In January 2025, the State of Maine Department of Labor will be releasing information regarding access to the online portal system for employers to register their business information and designate necessary contact information.

Withholding Contributions:

This new law will require that a contribution is made to the PFML fund of one (1%) percent of an employee’s wage rate, split between the employee and the employer.  However, employers with fewer than 15 employees are exempt from the employer portion of the required contribution but must still withhold 50% of the premium from their employees’ wages. Employers also have the option to apply for a private plan as a substitute but must be able to show that this plan offers substantially equivalent benefits as those offered under the state plan.

Leave Rules:

Maine’s Paid Family Medical Leave rules are similar to the federal law, and allows for leave for family purposes, such as care for a new child (birth, adoption, fostering), to care for family members with a serious health condition, for purposes of caring for one’s own medical needs, and for purposes of leave as a victim of domestic violence abuse.  Leave may also be taken for military deployment emergencies.  Leave may be utilized and scheduled as continuous leave, intermittent leave, or reduced leave.

PFML provides for guaranteed job protections for employees who have been employed with the same employer for at least 120 days.  An employee must give reasonable notice of their intent to take leave, absent an emergency, illness, or necessity to take leave and provide proof that the individual qualifies under one of the above noted approved reasons for leave.  The scheduling of the leave must not cause “undue hardship” on the employer.

The state recently released the official version of the state required posting that all employers must post informing employees of their rights under the PFML, which can be viewed here.

PrestigePEO is here to help. Employers should review their current leave policies and update them as necessary. Your HR Business Partner will be happy to assist you with any updates your business may need.

PrestigePEO is focused on supporting your business and will continue to monitor and provide updates as additional information on these changes becomes available.

As discussed in our September 2024 Insights, the Massachusetts EEO and Pay Data reporting deadline for filing the EEO-1 data reports is just around the corner.  This is a reminder that the reports are due to be filed no later than February 1, 2025.

Massachusetts EEO and Pay Data Reporting 

Who is required to Report?

• Private employers with 100 or more employees within Massachusetts during the calendar year preceding the reporting deadline and who are subject to EEO-1 reporting.

When and What are Employers required to report?

• Employers who qualify are annually required to submit an EEO data report to the Secretary of the Commonwealth by February 1, 2025. The EEO data report includes aggregate wage data categorized by job category, ethnicity, race, and sex. This data will be shared with the Massachusetts Department of Labor, but it has been determined that the data provided pursuant to this new EEO reporting law will not be defined as a public record for the purposes of the Massachusetts Public Records Law.

PrestigePEO is here to help and will continue to monitor for any additional guidance provided by the Commonwealth of Massachusetts as we draw nearer to the effective date.

A recent California Court of Appeal ruling in Rodriguez v. Lawrence Equipment, Inc. is a game-changer for employers navigating wage and hour disputes under the Private Attorneys General Act (PAGA). The Court confirmed that issue preclusion, where a previously decided matter cannot be relitigated, applies to PAGA claims and eliminates the employee’s standing. This marks a significant precedent for employers, underscoring that a favorable arbitration outcome on individual claims can block employees from pursuing PAGA representative claims for the same alleged violations.

Significant Precedent for Employers

This development could limit exposure to PAGA penalties, provided employers take strategic action to protect themselves. This ruling limits exposure and highlights the potential benefits of arbitration agreements when designed and implemented correctly. Employers who prevail in arbitration may resolve individual claims and shield themselves from broader PAGA exposure, offering optimism in the face of potential litigation.

Practical Steps for California Employers  

California employers should review and update policies, handbooks, and practices to ensure full compliance with California Labor Code requirements. Reviewing practices, including regular wage and hour audits, can mitigate risk and strengthen your position in arbitration.  Employers may consider implementing well-crafted agreements to help defend against class actions and PAGA claims. Review your agreements with legal counsel to confirm they meet California’s legal standards. If an employee initiates litigation, consult legal counsel to determine whether arbitration is viable and strategic, and remember that early intervention can significantly impact the outcome. By taking these proactive steps, businesses can minimize risk and focus on maintaining compliant workplace practices.

There have been recent legislative updates in Massachusetts and Connecticut. Both states have expanded paid sick leave benefits. This means adjustments will be necessary by employers.

In Massachusetts – Effective November 21, 2024, Massachusetts’ earned sick time law has been amended to allow employees to utilize sick leave for specific reproductive losses. This includes addressing physical and mental health needs arising from pregnancy loss, failed assisted reproduction, adoption, or surrogacy. This applies to both the employee and their spouse.

Necessary Employer Actions – Policy updates will be needed. Employers will need to revise sick leave policies to include the new provisions. Employers will also need to inform employees about the expanded sick leave benefits. Upper management will need to educate HR personnel on new updates so that way they can handle new leave requests appropriately.

In Connecticut – Effective January 1, 2025, Connecticut’s paid sick leave law will extend its coverage. Previously, the paid sick leave only applied to employers with more than 50 workers. Starting January 1, 2025, this applies to employers with 25 or more employees. Starting January 1, 2026, this applies to employers with 11 or more employees in Connecticut. Finally, starting January 1, 2027, this will apply to all employers with at least one employee. There is still an exception for seasonal employees. If an employee works less than 120 days, they will not be covered by this new sick leave law. One of the new rules under the expansion of the paid sick leave law pertains to accrual of sick leave. Employers will now be required to give at least one hour of paid sick leave per every 30 hours worked, capping this accrual at 40 hours per year.

Necessary Employer Actions – Employers will need to update sick leave policies. By January 1, 2025, employers will need to display the mandated paid sick leave posters in both English and Spanish. They must also give written notice to all employees.

Something interesting to note is that employers must retain sick time records for three years.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.

Starting January 1, 2025, an amendment to the Illinois Right to Privacy in the Workplace Act will impose significant new obligations on employers using the federal E-Verify system. While E-Verify remains legal in Illinois, this new law introduces strict requirements beyond federal guidelines. Employers must act quickly to comply with these changes and avoid penalties. Key Compliance obligations include mandatory notices and training, prohibited practices, detailed notification and attestation requirements, and employee protections.

Mandatory Notices and Training

• Employers must display federally and state-mandated E-Verify notices prominently in the workplace.
• All E-Verify employees must complete required training, with proof of completion retained for inspection.

Prohibited Practices

• E-Verify cannot be used to pre-screen job candidates or monitor current employees.
• Employers must safeguard sensitive data in E-Verify and prevent unauthorized access.

Detailed Notification and Attestation Requirements

• Employers must meet strict deadlines for filing attestations and notifying employees.
• Employers must file an attestation confirming receipt of training materials, compliance with training, and proper posting of notices within 30 days of enrolling in E-Verify or by January 31, 2025.
• When discrepancies are flagged in an employee’s verification documents, employers must notify the employee within five business days, provide clear guidance for resolving the issue, and outline the employee’s rights.
• Employers must inform all employees within 72 hours of receiving notice of an I-9 inspection. This notice must include the agency conducting the inspection, details of the inspection, and a copy of the notice.

Employee Protections

The law reinforces employee protections, prohibiting retaliation or adverse actions against those who file complaints or contest findings. Employers must ensure all communications about discrepancies or inspections are provided in the employee’s preferred language when possible, including clear timelines, findings details, and the employee’s right to representation.

Practical Steps for Employers  

To comply with these new requirements, employers should audit E-Verify practices and review policies to ensure they align with state and federal requirements. They should also avoid practices that misuse the system, ensure all E-Verify users are trained, document certifications, establish procedures to meet notification deadlines and ensure multilingual and detailed communications.

By taking these steps, employers can continue to use E-Verify responsibly while meeting Illinois’s enhanced compliance standards. For additional guidance and templates, visit the Illinois Department of Labor website.

The November 5, 2024, elections brought significant developments in marijuana legalization across the United States. Nebraska voters approved medical marijuana use, marking a milestone for the state. However, ballot measures to legalize recreational marijuana were rejected in Florida, North Dakota, and South Dakota. In Massachusetts, a measure to legalize psychedelic drugs, including magic mushrooms, was also defeated. These developments highlight the evolving landscape of marijuana legalization and its implications for public policy, healthcare, and the workplace.

As of now, 38 states have legalized medical marijuana, and 24 states, plus Washington, D.C., have legalized recreational marijuana.  Despite the growing acceptance, challenges remain, particularly around legal frameworks, workplace policies, and enforcement.

Recreational Marijuana is legal in the following states: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, Washington, D.C.

Medical Marijuana Legalization includes all recreational-use states, plus Alabama, Arkansas, Florida, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Nebraska (new), New Hampshire, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin, and Wyoming.

Employer Considerations

The growing use of cannabis creates complex challenges for employers. While state laws on drug testing and workplace policies vary, businesses can still prohibit marijuana use and impairment during work hours and may terminate employees who violate these policies. The Americans with Disabilities Act does not recognize medical marijuana use as a protected accommodation.

Employers in industries regulated by federal agencies, such as the Department of Transportation, must maintain strict drug-testing protocols. Marijuana remains illegal at the federal level, impacting industries with strict compliance requirements.

What Employers Should Know as We Enter 2025

As marijuana laws continue to evolve, employers must navigate a complex legal landscape in 2025. Key considerations include reviewing and updating workplace drug policies to align with current state laws, clarifying expectations regarding marijuana use and impairment on the job, and monitoring legal updates.

Employers must balance accommodating changing societal norms with maintaining safe and productive workplaces. Starting the year with a clear plan for addressing marijuana-related workplace issues will help organizations adapt to this shifting regulatory environment.

Massachusetts voters recently rejected a ballot measure that would eliminate the tip credit system. Voters have recently chosen to retain the current tip credit system, which allows employers to pay tipped employees a base wage of $6.75/hour, as long as total earnings meet or exceed the state minimum wage which is $15/hour. The proposed change would have mandated that tipped employees receive the full state minimum wage—currently $15/hour by 2029, plus any tips earned. This rejection avoids increased labor costs for employers. This also means that employers can continue using the tip credit to meet minimum wage and not make any changes, which will also avoid increased payroll expenses for employers. Despite voter rejection of the proposed change, employers are advised to remain compliant with all current wage and hour laws, at the local, state, and federal level.

Recommended Actions for Employers – Maintain transparency with tipped employees regarding their pay structure and rights. Employers can do this by keeping handbooks and policies up to date.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.

On November 6, 2024, New York voters approved the Equal Rights Amendment, or “Proposition 1. This amended the state constitution codifies voters decision to prohibit discrimination based on race, color, ethnicity, national origin, age, disability, creed, religion, sex, sexual orientation, gender identity, gender expression, pregnancy/pregnancy outcomes, and reproductive healthcare, otherwise expanding the provision of the existing constitutional civil rights. This goes into effect on January 1, 2025.

Expanded Anti-Discrimination Obligations for New York State Employers – Employers must ensure that their policies and practices do not discriminate based on the newly protected categories. Existing laws already prohibit such discrimination, but the Equal Rights Amendment enforces these protections in the state constitution.

Recommended Actions for New York State Employers – Revise employee handbooks, codes of conduct, and anti-discrimination policies to include the newly protected categories. Employers should also consider implementing new training for all employees, especially management and HR. Updating procedures for employees to report discrimination or harassment related to the newly protected categories is also a good idea.

By proactively addressing these areas, employers can ensure a safe workplace and mitigate the risk of discrimination claims under the expanded protections of New York’s constitution.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.

On November 5, 2024, voters in seven states approved constitutional amendments affirming the right to abortion. These seven states were Arizona, Colorado, Maryland, Missouri, Montana, New York, and Nevada. On the other hand, attempts to expand abortion access were rejected in Florida, Nebraska, and South Dakota.

Implications for Employers and Coverage – In states where abortion rights are now constitutionally protected, employers should be prepared to review and potentially adjust their healthcare plans to ensure coverage aligns with the new legal requirements.

Communication Advice and Recommendations for Employers – Clear communication with employees regarding any changes to healthcare benefits and policies related to reproductive health is essential to maintain transparency and trust. Employers should assess current healthcare coverage to make sure that it includes services in line with the new abortion rights in applicable states. Updating employee handbooks to incorporate changes is a great idea.

Some State Specific Key Points

Colorado – Already a state with strong abortion rights, this amendment provides constitutional protection, possibly leading to increased expectations for employer-provided coverage of reproductive health services.

Missouri – A traditionally restrictive state on abortion rights; this change may necessitate significant adjustments in healthcare benefits and workplace policies.

New York – Employers in New York must ensure full compliance with constitutional guarantees, potentially expanding coverage or support for abortion services.

Nevada – While Nevada already has abortion protections, constitutional backing may increase expectations for employers to provide clear reproductive healthcare access.

Legal and Compliance Considerations for Employers – Employers face heightened legal risks if they fail to comply with constitutional protections or provide adequate support for reproductive healthcare.

Implications Across States – Employers operating in multiple states may face challenges balancing reproductive healthcare policies in states with differing laws. In Restrictive states employers may need to clarify what benefits are available when state laws conflict with federal mandates. In Protected states, enhanced benefits may need to be publicized to align with employee expectations and remain competitive.  Additionally, employers need to remain vigilant in ensuring their anti-discrimination policies and employee training efforts align with the requirements provided for in the Pregnancy Discrimination Act and Title VII of the Civil Rights Act of 1964, which prohibits discrimination against an employee for having or considering having an abortion.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions or for assistance with any updates your business may need.