Although the bulk of state lawmaking has finished for 2018, those few states still in session are moving quickly on pending bills. California lawmakers, for example, had until the end of August to move bills to the governor’s desk; Governor Brown now has until September 30 to sign or veto those measures. Illinois’ legislative session has closed, but in August Governor Rauner signed and vetoed a handful of labor and employment-related bills that had cleared both state chambers during the year. Meanwhile, some states and cities are adding new questions with employment implications to the November ballot. This month’s State of the States highlights the labor and employment bills and ordinances that advanced in August.
California Lawmakers Push Legislation to the Governor’s Desk
The California legislature passed 18 labor and employment-related bills by the August 31 deadline. These bills address a wide variety of issues, including sexual harassment, lactation accommodations, homecare aide labor organizing, contractor liability, immigration, workers' compensation, workplace safety, and gender equality.1 Bills targeting sexual harassment—whether by beefing up existing state antidiscrimination law, expanding training requirements, or by restricting the use of non-disclosure agreements, releases, and mandatory arbitration provisions—were the most popular bills by far. The governor will consider at least a dozen bills addressing these issues over the next few weeks.
Antidiscrimination, Lactation Accommodation, and Equal Pay
Bills addressing sexual harassment gained momentum outside California in August as well. New York Governor Andrew Cuomo issued an executive order creating a model policy, complaint form, and training, as required by New York State’s new sexual harassment law. The model policy not only meets the requirements of the New York State sexual harassment law passed as part of the 2018-2019 budget bill, but goes beyond those requirements. For example, the model policy would have New York State employers maintain a “zero-tolerance policy for any form of sexual harassment.” The compliance deadline for these components of the sexual harassment law is October 9, 2018.2
New York City similarly released a workplace poster and fact sheet to satisfy the notice requirements of both the New York State and New York City sexual harassment proposals approved in 2018. The fact sheet should fulfill the notice requirement under the City law. Employers may, however, choose not to distribute the stand-alone fact sheet if employees receive the information in the form of an employee handbook or other policy. For New York City employers, the compliance poster must be conspicuously displayed by September 6, 2018.3
New York also introduced a bill (AB 11301) that would require employers to inform their workers that non-disclosure or non-disparagement provisions in their employment contracts cannot prevent them from speaking with law enforcement or the Equal Employment Opportunity Commission.
Down the eastern seaboard, Delaware Governor John Carney signed H.B. 360 into law, expanding sexual harassment protections for employees in Delaware. The law affects all Delaware employers with four or more employees, with additional training requirements for employers with 50 or more employees. Employers with 50 or more employees are required to provide interactive sexual harassment training within one year of the commencement of their employment for new employees or by January 1, 2020, for existing employees. The law requires employers to notify employees of the new law via an information sheet that the Delaware Department of Labor will produce. Employers must issue this notice to all existing employees by July 1, 2019.4
Measures promoting pregnancy and lactation accommodation also progressed last month. The South Carolina Human Affairs Commission issued a poster to comply with the recently passed Pregnancy Accommodations Act (PAA). The PAA amends the South Carolina Human Affairs Law to extend discrimination protections and reasonable accommodations to “women affected by pregnancy, childbirth, or related medical conditions.” The PAA requires employers to notify employees of these protections and authorizes employers to do so by conspicuously hanging a poster containing the relevant information. The South Carolina Human Affairs Commission has provided the recommended poster, and the deadline for compliance with the notice requirement is September 14, 2018.5
Illinois expanded the Nursing Mothers in the Workplace Act (NMWA) to grant paid time off for nursing breaks.6 When originally passed, the NMWA required employers to provide nursing mothers with unpaid break time each day for expressing milk, and these breaks had to run concurrently with any break time already provided to the employee. The recently passed amendment to the NMWA precludes employers from reducing an employee’s compensation for the time spent expressing milk or nursing. Employers may be exempted if they can show that providing paid lactation breaks would be prohibitively expensive or disruptive when considering the nature and cost of the breaks, the financial resources of the facility, the overall financial resources of the employer, and the employer’s type of business.
At the local level, Baltimore, Maryland is considering an ordinance (No. 18-0276) that would require employers to provide a reasonable amount of break time to accommodate an employee expressing milk. The ordinance would cover employers with two or more full-time employees in the city of Baltimore. Employers would also have to provide a private lactation location other than a bathroom or closet that is private, safe, clean, and free of hazardous materials. Employers could seek a waiver from these requirements by demonstrating to the Baltimore Community Relations Commission that compliance would impose “undue hardship by causing significant expense or operational difficulty.”
Finally, the salary history ban trend continues. A bill (HB 4163) in Illinois has made its way to the governor’s desk. The proposal would make it unlawful for an employer to screen job applicants based on their salary history, to seek the salary history of any applicant from a current or former employer, or to request salary history as a prerequisite to being interviewed or as a condition of an offer of employment or compensation. Governor Rauner vetoed a similar bill last year, and the legislature failed to override his decision.
Protected Time Off
On August 16, 2018, San Antonio, Texas adopted a paid sick and safe leave ordinance.7 The San Antonio ordinance covers employees who perform at least 80 hours of work within city limits and entitles them to accrue one hour of leave for every 30 hours worked. Employees working for employers with 15 or more employees may earn up to 64 hours annually, while an accrual cap of 48 hours applies for employees of smaller businesses.
The San Antonio law is nearly identical to the ordinance passed earlier this year in Austin. Both ordinances, however, appear to be in jeopardy. Various organizations, including the Texas attorney general, have argued that state law preempts the Austin ordinance—and any similar local law. A Texas appellate court recently issued an order temporarily enjoining Austin’s ordinance from taking effect until the appeal is resolved. The ultimate outcome of the Austin lawsuit will likely determine the future of the San Antonio ordinance.
Meanwhile, Massachusetts enacted a law that allows employees who are veterans to take sufficient leave to participate in Memorial Day exercises or to observe Veterans Day. Under this statute, it is at the employer’s discretion as to whether the leave is with or without pay.
Ohio enacted a law providing a legal safe harbor to covered entities that adopt a specified cybersecurity program. Covered entities under the law are businesses that access, maintain, communicate, or process personal information or restricted information in or through one or more systems, networks, or services located in or outside of the state of Ohio. Covered entities may take advantage of an affirmative defense in the instance of a data breach if they create, maintain, and comply with a written cybersecurity program satisfying the requirements set out in the statute. The affirmative defense could be raised in the event of a data breach to defeat tort claims that allege the business’ failure to implement reasonable security controls.
Unemployment and Noncompetition
New Jersey expanded its unemployment insurance program to provide coverage to employees in instances of a labor dispute.8 The amendment offers unemployment insurance benefits to employees during a labor dispute caused by an employer’s failure to comply with a contract with an employee, a union, or failure to comply with state or federal wage and hour laws. Benefits are also given to employees 30 days after they have gone on strike, or immediately when they go on strike if the employer hires permanent replacement workers. New Jersey also changed the definition of misconduct that would disqualify an individual from receiving unemployment benefits.9
Massachusetts enacted parts of a bill, the Massachusetts Noncompetition Agreement Act (MNAA), that focused on noncompetition agreements, joint employment relationships involving professional employer organizations (PEO), and apprenticeships.10 The MNAA will limit the duration of noncompete agreements entered into after October 1, 2018, to 12 months post-employment. The law also mandates the use of a “garden leave clause” to pay 50% of the employee’s salary during the noncompete agreement’s duration. The MNAA clarifies that clients in PEO relationships will have the right to direct and control employees as necessary and will be afforded all rights and obligations typically given to an employer, while in all other respects the professional employer agreement between the parties will define the employment relationship. Finally, the MNAA provides a tax credit equal to $4,800 or 50% of the wages paid to each qualified apprentice in a taxable year, whichever is less. To be qualified, the employee must be at least 16 years of age, engaged pursuant to an apprentice agreement, and receive training from the company in an eligible field.11 Sections of the MNAA that were not signed by the governor are returning to the legislature for amendment.
In preparation for the upcoming November 6th elections, Missouri and North Dakota have approved ballot initiatives addressing the use of medical and recreational marijuana, the expungement of drug convictions related to marijuana, and increasing the minimum wage. The North Dakota ballot initiative would remove marijuana from the state’s schedule 1 listing. The initiative would penalize a minor’s possession of marijuana in the same manner as a minor’s possession of alcohol. It would similarly amend the penalty for distribution of marijuana to individuals under the age of 21 to conform with the punishment for sale of alcohol to a minor. Finally, the initiative would require that records of state drug convictions related to marijuana possession be expunged and sealed.
Missouri approved two ballot initiatives (available here, and here) that would amend the state constitution to provide for the use and distribution of medical marijuana. Both initiatives would authorize the prescription, sale, and research use of medical marijuana for patients diagnosed with certain medical conditions, including cancer, epilepsy, and any terminal illness. Both measures create similar licensing, taxation, and reporting requirements on medical marijuana providers. The difference between the two is that one initiative (2018-041) would create the Biomedical Research and Drug Development Institute (Institute) to research cures for presently incurable diseases.
Missouri has approved another ballot initiative that would increase the minimum wage to $8.60 an hour on January 1, 2019, or the prevailing federal minimum wage for jobs in interstate commerce, whichever is higher. The minimum wage would then be increased by $0.85 per hour on January 1 of each of the following four years, reaching $12.00 on January 1, 2023. Subsequent annual adjustments would be based on increases or decreases to the cost of living.
As many state legislatures are closing their doors, we will keep a close eye on California, as the September 30th deadline for Governor Brown to sign legislation looms. We will continue to monitor legislative and regulatory movements at the state and local levels, and report on any significant developments.