2019 HR UPDATE


DON’T BECOME A #METOO STATISTIC!

It’s been a year since the #MeToo movement has brought sexual harassment, front and center. It is transforming workplace culture.  According to the EEOC, sexual harassment claims have increased more than 12% and is likely attributed to the #MeToo movement.  Because the movement has raised awareness, a greater percentage of sexual harassment victims will report their concerns.  Employers need to be prepared to address these concerns.  Employers must continue to stay proactive and ensure they have preventative measures in place to avoid becoming another #MeToo statistic.  Here’s how:

1. Employers should review their harassment policy, annually, and ensure that they have a clear policy that prohibits harassment and that the Company is adhering to it.

2. Employers need to ensure their policy is meeting the legal requirements (keeping in mind that some states have new provisions in 2019, regarding confidentiality as it pertains to harassment settlements).

3. Employers should adopt and foster an open-door policy to ensure early and proper reporting. New laws have been passed, regarding the standard of proof on sexual harassment.

4. Employers will need to provide proper training. Certain states will require employers to provide unlawful harassment training to ALL employees - supervisory and non-supervisory roles. New York and California have already passed legislation, mandating such training. The trend will be that more and more states will pass such legislation.

5. Employers should ensure they have a proper reporting/documentation procedure in place that addresses concerns immediately and conducts investigations, when warranted.


MINIMUM WAGE INCREASES

State by State

MINIMUM WAGE INCREASES


Under the Fair Labor Standards Act (FLSA), the federal minimum wage hasn’t changed, since July 2009, when an amendment brought the rate to $7.25 per hour.  However, this hasn’t stopped our states and other local areas from establishing their own minimums, most of which are changing, annually. In 2019, numerous state and local area minimums will be increasing. 

The following minimums will be effective January 1, 2019, unless otherwise indicated.

Alabama: $7.25

Alaska: $9.89

Arizona: $11.00

·       Flagstaff: $12.00

Arkansas: $9.25

California: $11.00 for small companies with 25 employees or less; $12.00 for companies with more than 25 employees.

·       Belmont: $13.50

·       Berkeley: $15.00 (This will increase on October 1st – rate TBD.)

·       Cupertino: $15.00

·       El Cerrito: $15.00

·      Emeryville: $15.00 for small companies with 55 employees or less; $15.69 for companies with more than 55 employees (This will increase on July 1st – rate TBD.) 

. Los Altos: $15.00

·      Los Angeles City: $13.25 (July 1st) for small companies with 25 employees or less; $14.25 (July 1st) for companies with more than 25 employees

·    Los Angeles County (unincorporated areas):  $13.25 (July 1st) for small companies with 25 employees or less; $14.25 (July 1st) for companies with more than 25 employees

·      Malibu: $13.25 (July 1st) for small companies with 25 employees or less; $14.25 (July 1st) for companies with more than 25 employees

·      Milpitas: $15.00 (July 1st)

·      Mountain View: $15.65

·       Oakland: $13.80

·       Palo Alto: $15.00

·       Pasadena:$13.25 (July 1st) for small companies with 25 employees or less; $14.25 (July 1st) for companies with more than 25 employees

·       Redwood: $13.50

·       Richmond: $15.00

·       San Diego: $12.00

·      San Francisco: $15.00 (This will increase on July 1st – rate TBD.)

·     San Jose: $15.00

·     San Leandro: $14.00 (July 1st)

·      San Mateo: $15.00; $13.50 for non-profit organizations

·      Santa Clara: $15.00

·      Santa Monica: $13.25 (July 1st) for small companies with 25 employees or less; $14.25 (July 1st) for companies with more than 25 employees

·       Sunnyvale: $15.65

Colorado: $11.10

Connecticut: $10.10

Delaware: $8.75

Florida: $8.46

Georgia: $7.25

Hawaii: $10.10

Idaho: $7.25

Illinois: $8.25

·      Chicago: $13.00 (July 1st)

·       Cook County (outside of Chicago): $12.00 (July 1st)

Indiana: $7.25

Iowa: $7.25    

Kansas: $7.25

Kentucky: $7.25

Louisiana: $7.25

Maine: $11.00

·       Portland: $11.00 (This will increase on July 1st – rate TBD.)

Maryland: $10.10

·      Montgomery County: $12.50 (July 1st) for small companies with 50 employees or less; $13.00 (July 1st) for companies with more than 50 employees

·   Prince George’s County: $11.50

Massachusetts: $12.00

Michigan: $9.25

Minnesota:  $8.04 for small companies with annual gross revenue less than $500k; $9.86 for large companies with annual gross revenue of $500k or more

·      Minneapolis: $11.00 (July 1st)for small companies with 100 employees or less; $12.25 (July 1st) for companies with more than 100 employees

Mississippi: $7.25

Missouri: $8.60

Montana: $8.50 

Nebraska: $9.00 

Nevada: $7.25 for employees who receive qualifying health benefits, $8.25 for employees who do not receive qualifying health benefits

New Hampshire: $7.25

New Jersey: $8.85

New Mexico: $7.50

·      Albuquerque: $8.20 for employees who receive qualifying health benefits, $9.20 for employees who do not receive qualifying health benefits

·      Bernalillo County (outside of Albuquerque): $8.05 employers provide health benefits, $9.05 for employees who do not provide health benefits

·       Las Cruces: $10.10

·       Santa Fe City & County: $11.40 (This will increase on March 1st – rate TBD.)

New York: $11.10 (December 31st, 2018)

·      Fast Food Companies (outside of New York City): $12.75 (December 31st, 2018)

·      Nassau, Suffolk and Westchester Counties: $12.00 (December 31st, 2018)

·      New York City: $13.50 (December 31st, 2018) for companies with 10 employees or less, $15.00 (December 31st, 2018) for companies with more than 10 employees

·      New York City – Fast Food Companies: $15.00 (December 31st, 2018)

North Carolina: $7.25

North Dakota: $7.25

Ohio: $7.25 for small companies with annual gross revenue less than $314k; $8.55 for large companies with annual gross revenue of $314k or more

Oklahoma: $7.25

Oregon: $11.00 (July 1st)

·       Portland Metro: $12.50 (July 1st)

·       Standard Counties: $11.25 (July 1st)

Pennsylvania: $7.25

Rhode Island: $10.50 

South Carolina: $7.25

South Dakota: $9.10 

Tennessee: $7.25

Texas: $7.25

Utah: $7.25

Vermont: $10.78

Virginia: $7.25

Washington: $12.00

·       SeaTac (Hospitality & Transportation Companies): $16.09

·      Seattle: $12.00 for employees who receive qualifying health benefits in companies with 500 employees or less; $15.00 for employees who do not receive qualifying health benefits in companies with 500 employees or less; $16.00 for companies with more than 500 employees

Tacoma: $12.35

Washington D.C.: $13.25

West Virginia: $8.75

Wisconsin: $7.25

Wyoming: $7.25


MINIMUM SALARY FOR OVERTIME EXEMPTION


2018‐2019 MINIMUM SALARY FOR OVERTIME EXEMPTION

FEDERAL

WEEKLY  

$455.00

ANNUALLY

$23,660.00

AL AR AZ DE FL GA  IA ID IL IN KS KY LA MA MD MI MN MO MS MT NC NE NH NJ NM NV OH OK PA RI SC TN TX UT VT WA WI WV WY

ALASKA

 


JANUARY 1, 2018

JANUARY 1, 2019

WEEKLY

$787.20

$791.20

ANNUALLY

 $40,934.40 

  $41,142.40

CALIFORNIA

26+ EMPLOYEES


JANUARY 1, 2018

JANUARY 1, 2019

WEEKLY 

$880.00

 $960.00

ANNUALLY  

$45,760.00

$49,920.00

COMMISSIONED, 26+ EMPLOYEES

WEEKLY

$660.00

$720.00

ANNUALLY 

$34,320.00

$37,440.00

<26 EMPLOYEES

WEEKLY

$840.00

$880.00

ANNUALLY   

$43,680.00 

$45,760.00

COMMISSIONED, <26 EMPLOYEES

WEEKLY   

$630.00

$660.00

ANNUALLY  

$32,760.00

$34,320.00


COMPUTER PROFESSIONALS

HOURLY 

  $43.58 

$45.41

WEEKLY 

$7,565.85

$7,883.62

      ANNUALLY 

$90,790.07

$94,603.25

LICENSED PHYSICIANS/SURGEONS

HOURLY   

$79.39 

$82.72

   ANNUALLY 

NA

NA

COLORADO

COMMISSIONED EMPLOYEES


JANUARY 1, 2018

JANUARY 1, 2019

HOURLY

$15.30 

$16.65

ANNUALLY  

$31,824.00 

 $34,632.00

DOCTORS, LAWYERS, TEACHERS, COMPUTER…

HOURLY 

   $27.63

$27.63

ANNUALLY

NA

NA

CONNECTICUT

WEEKLY

$475.00

ANNUALLY     

$24,700.00

D.C.

COMMISSIONED EMPLOYEES

HOURLY

 $19.88

ANNUALLY 

$41,340.00

HAWAII

MONTHLY   

 $2,000.00

ANNUALLY

$24,000.00

MAINE

WEEKLY

$576.93

ANNUALLY    

  $30,000.36

NEW YORK


12/31/2017

12/31/2018

WEEKLY       

$780.00

  $832.00

ANNUALLY

$40,560.00

$43,264.00

NASSAU/SUFFOLK/WESTCHESTER COUNTY

WEEKLY   

$825.00

$900.00

ANNUALLY  

$42,900.00

$46,800.00

NEW YORK CITY <11 EMPLOYEES

WEEKLY  

$900.00 

$1,012.50

ANNUALLY 

$46,800.00 

$52,650.00

NEW YORK CITY 11+ EMPLOYEES

WEEKLY  

   $975.00

 $1,125.00

ANNUALLY

$50,700.00

$58,500.00

OREGON

PORTLAND METRO ZONE

WEEKLY      

   $480.00

ANNUALLY    

$24,960.00


Employment Legislation

California

EMPLOYMENT LEGISLATION

California Legislation

There were 2,225 bills introduced and 1,016 made it to the Governor for signature. Only 83.5% of the 1,016 bills were signed into law.  Below is the summary of employment laws effective January 1, 2019, unless otherwise noted.

HIRING

AB 2282 – Clarifies salary history ban legislation that was passed on January 1, 2018.  The new bill 1) defines terms, such as applicant, reasonable request, and pay scale, 2) allows employers to inquire about salary expectations, and 3) delineates between applicant and current employee.

SB 1412 – Allows an employer the ability to consider sealed or expunged convictions to only those circumstance where a particular conviction would legally prohibit someone from holding that job.

HARASSMENT, DISCRIMINATION AND RETALIATION PROTECTIONS

AB 2770 – Ensures that victims of sexual harassment and employers will not be sued for defamation by the alleged harasser.

SB 820 – Prohibits any settlement agreement in a case where sexual harassment, assault or discrimination has been alleged from including a confidentiality provision that prohibits disclosure of factual information regarding the claim, except with regard to the claimant’s identity.

SB 1343 – Requires employers with 5+ employees to provide one (1) hour training to non-supervisory employees within six months of hire, and every two (2) years, thereafter.  All employees must be trained by January 1, 2020.  Also requires employers with 5+ employees to provide two (2) hours of supervisory training by 2020.

SB 1300 – Provisions change the way sexual harassment claims are litigated: 1) limitations on release of claims and on-disparagement agreements, 2) limitations on a prevailing employer right to fees and costs, 3) expands harassment liability for 3rd parties, and 4) allows employers to provide optional “bystander intervention” training.  Also, Legislature states that a single act of harassing conduct is sufficient to create a “triable issue of hostile work environment,” lowers the standard of proof of bringing a harassment claim and declares that the legal standard for sexual harassment claims should not varied by type of workplace.

AB 3109 – Bars settlement agreement provisions that prevent testifying in legal or legislative proceedings.

AB 2338 – Talent agencies will need to provide their adult talents with educational materials on sexual harassment protection, as well as nutrition and eating disorders.  Artists who are between the ages of fourteen (14) and seventeen (17), along with their parent(s) or guardian(s), must receive and complete training in sexual harassment prevention, before they are issued a work permit.

SB 826 – California based publicly traded corporations must have at least one (1) female director on their board of directors by the end of 2019.

LACTATION ACCOMMODATION

AB 1976 – Employers must make reasonable efforts to provide a room “other than a bathroom” to allow employees to express milk in private.

HUMAN TRAFFICKING

SB 970 – By January 1, 2020, hotel/motel employers must provide twenty (20) minutes of training to employees that are likely to come into contact with victims of human trafficking and then provide training, thereafter, every two (2) years.

PAYROLL RECORDS

SB 1252 – Clarifies changes designed to ensure that employers make and provide copies of payroll records and don’t require employees to find ways to make copies themselves.

CONTRACTOR

AB 1565 – Clean-up bill to last year’s AB 1701 that imposed, for certain private construction contracts, liability on general contractor for unpaid wages, benefits or contributions that a subcontractor owes to a worker under that contract.  AB 1565 removes a provision that indicated a direct contractor’s liability for unpaid wages or benefits in addition to any obligations and remedies otherwise provided by law.

California Court Ushers In Sweeping Changes For Scheduling Policies

A California Court of Appeal just announced a sweeping change in California’s reporting time pay rules which now prohibits a common scheduling practice used by employers throughout the state (Ward v. Tilly’s, Inc.). Yesterday’s decision means that California employers who require employees to call in two hours before a shift to determine whether or not they are needed, and report to work if called in, are now obligated to pay that employee, at a minimum, for two hours of work even if the employee is informed that there is no need to come in to work that day. Unfortunately, the case left many questions unanswered and, as a result, you should be careful to craft scheduling policies that avoid the same pitfalls seen in that case.

Legislation in other States

The following is a summary of key legislation that has passed, recently. Unless otherwise noted, all new legislation is effective January 1, 2019.

Connecticut

Public Act No. 18-8 – “An Act Concerning Pay Equity.” Prohibits employers from asking applicants about salary history.

Delaware

HB 360 amends the Delaware Discrimination in Employment Act by prohibiting sexual harassment in the workplace and imposing new requirements regarding sexual harassment training on most Delaware employers

Missouri

Missouri legalizes medical use of marijuana for qualifying patients and allows people who qualify to grow their own plants.

New Jersey

On November 13, 2018, the New Jersey Appellate Division issued a new decision that affects how arbitration agreements are drafted.  Employers will need to review their arbitration agreements to ensure that those agreements identify the forum for arbitration or at a minimum provide a general method for selecting an arbitration setting.

New York

New York enacted an anti-sexual harassment law with strict requirements for anti-harassment policies and training.  The law went effect on October 9, 2018 and required every employer in New York to establish a sexual harassment prevention policy and provide employees with sexual harassment prevention training by October 9, 2019.

Oregon

Oregon Bureau of Labor and Industries issued its final administrative rules, related to the state’s equal pay law, which prohibits pay discrimination based on protected characteristics, as well as screening applicants, based on past and current compensation.


INDEPENDENT CONTRACTOR STATUS

INDEPENDENT CONTRACTOR STATUS

Employers in California have traditionally used the set IWC standards, such as “exercises control,” to determine if a worker is classified as an “employee” or as an “independent contractor”.  On April 30, 2018, the California Supreme Court made a ruling that may make it difficult for employers to classify their workers as independent contractors.  Adopting an “ABC” standard for determining status of employee vs. independent contractor, employers need to review their classifications of workers to be in compliance with these new standards.

Background

In Dynamex Operations West, Inc. v. Superior Court, Dynamex contended that the drivers they employed were independent contractors and not employees.  In 2004, Dynamex converted all their drivers, who were considered employees at the time, to independent contractors.  The drivers filed a claim noting that they were performing the same tasks as independent contractors as when they were employees, thus their reclassification was against the law.

The ABCs

From the ruling, the court adopted the “ABC” test for independent contractors.  If employers did not meet their “ABCs,” their worker would be considered an employee, under the California Wage Orders.  According to Fisher Phillips, an employer law group, the court developed the below three (3) prongs (ABCs):

Prong A: “Free From Control And Direction”

The court first discussed the “A” prong, which is akin to the common law control standard. The court concluded that a worker who is, either by contract or by practice, subject to the type and degree of control a business typically exercises over employees, should likewise be considered an employee. Accordingly, businesses must now establish that workers are free of such control to meet this part of the test. The court confirmed that a business “need not control the precise manner or details of the work” in order to be found to have maintained the necessary control sufficient to lead to a finding of employee status.

Prong B: “Outside Usual Course Of Business”

Prong “B” seeks to determine whether workers can reasonably be viewed as individuals who are providing services to the business in a role comparable to that of an employee, rather than in a role comparable to that of a traditional independent contractor. Workers whose roles are “most clearly comparable” to those of employees include workers whose “services are provided within the usual course of the business” and thus would “ordinarily be viewed by others as working in the hiring entities’ business.” Thus, this prong those within the definition of employee to include almost any worker who engages in the same business as the hiring entity. 

The court used the example of a retailer that hires a plumber or electrician to perform maintenance at their establishment; such a worker would be hiring someone outside of the company’s business and thus would be able to demonstrate independent contractor status. On the other hand, a clothing manufacturer that hires a work-at-home seamstress, or a bakery hiring a cake decorator, would typically not be able to make such a demonstration.

Prong C: Customarily Engaged In Independent Trade

The third “C” prong seeks to identify those workers that have taken steps to create their independent business. If the worker has independently made the decision to go into business for themselves, they are likely to be found as satisfying this third prong. If, on the other hand, they are “simply designated as an independent contractor by the unilateral action of a hiring entity,” there is a substantial risk they will be found to be an employee.

The good news: the court stated that a business does not necessarily have to prove that workers in question took steps such as incorporation, licensure, advertising, and the like to prove this prong. The bad news: the court also stated that the simple fact that a company does not prohibit or prevent a worker from engaging in such an independent business is insufficient to establish a worker has independently made the decision to go into business for themselves.”

What Next?

Misclassifying a worker can expose employers not only to tax implications but also to additional wage and hour claims.  Employers are strongly encouraged to review and audit their independent contractor workers and their contracts.

HEALTH CARE REFORM 2019 UPDATE


HEALTHCARE REFORM

HEALTH CARE REFORM 2019 UPDATE

On Friday, December 17, 2018, a Texas federal judge ruled that the tax reform law passed by Congress, the Tax Cuts and Jobs Act, unconstitutional.  The Act, passed in 2017, made significant changes to individual and corporate provisions of the U.S. tax code. The bill includes permanent effective repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019. Please note that for 2018, most individuals were still required to maintain coverage or pay a penalty when they filed their 2018 federal income tax returns.  At this time this ruling will not affect any changes, as this ruling will go through the appeal process and most likely make its way up to the Supreme Court again.

Cadillac Tax Delayed

The Cadillac Tax imposes a 40% excise tax on health insurance coverage in excess of certain thresholds. When originally enacted with a 2018 effective date, the thresholds were $10,200 for self-only and $27,500 for family coverage. The tax has been delayed again and the thresholds will be updated, prior to the new January 1, 2022 effective date.

Health Insurance Industry Fee (a.k.a. Health Insurer Tax)

Congress has also suspended the Health Insurance Industry Fee for 2019. This fee began in 2014 and was previously suspended for 2017, but went back into effect for 2018.

2018 Form 1095-C deadline extension

The Internal Revenue Service (IRS) announced new deadlines for 2018 Form 1905-B and Form 1095-C reporting to individuals. The original deadline was January 31, 2019 and this has been extended to March 4, 2019.

TAX UPDATES


FEDERAL
FICA (Social Security)



Maximum Taxable Earnings

$132,900 ($4,500 increase from 2018)


Employer/Employee 2019 Withholding Percent

6.2%


Employer/Employee 2019 Maximum Withholding

$8,239.80 ($279.00 increase from 2018)



FICA (Medicare)



Maximum Taxable Earnings

No Limit


Employer/Employee 2019 Withholding Percentage

1.45%


Employer/Employee 2019 Maximum Withholding

No Limit.

(No change from 2018)


Additional Medicare Tax for Wages in Excess of $200,000, Rate 0.9% is required to be deducted by Employers



SUPPLEMENTAL WAGES



Rate (flat rate method)

22%


Over $1 million

37% (No change from 2017)



WITHHOLDING


Congress has not finalized their decision to adjust tax rates, therefore, 2018 tables have not been finalized. Changes will be communicated once announced.


401(k) PLAN DEFERRAL LIMITATIONS



Elective Deferrals

$19,000 ($500 increase from 2018)



401K Catch Up Contribution Deferrals

$6,000 (No change from 2018)



HSA PLAN DEFERRAL LIMITATIONS



Individual Maximum Contribution (Includes Employer Contribution)

$3,500

($50 increase from 2018)


Family Maximum Contribution (Includes Employer Contribution)

$7,000 (No change from 2018)



Catch Up Contributions (55+ years old)

$1,000 (No change from 2018)


FSA PLAN THRESHOLDS



Health Max Election

$2,700 ($50 increase from 2018)


Dependent Care Max Election

$5,000 (No change from 2018)


TRANSPORTATION THRESHOLDS



Pre-tax Parking Max Election

Mass Transit Max Election

$265/month ($5 increase 2018)

$265/month ($5 increase 2018)



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This information is intended to provide an overview of some important employment law updates within the United States. It is not intended to be an exhausted list of legislation and/or legal advice for any specific situation or set of facts. Whenever you are dealing with any employment-related situation it is always a good idea to seek the advice of a ModernHR Human Resources Representative or competent legal counsel.