May begins the legislative homestretch for a number of states. Nearly half of the state legislatures have adjourned for the year, and another nine are expected to end their sessions by the end of the month. As a result, only about 30 new bills and ordinances were introduced in April, down from the hundreds that had flooded the legislatures since the beginning of the year. Most of the legislative activity last month focused on active consideration of these pending measures.
Some significant bills were signed into law in April. New Jersey lawmakers are touting the Diane B. Allen Equal Pay Act as the strongest equal pay legislation in the country. Massachusetts and San Francisco amended their ban-the-box laws. By contrast, Wisconsin enacted a preemption statute to prevent municipalities from adopting a wide array of employment laws that deviate from state law. This month’s State of the States highlights these and other laws that are advancing.
New Jersey’s amended equal pay statute will take effect on July 1, 2018, leaving employers with little time to examine their pay practices and ensure compliance.1 Under the new law, employees will be entitled to an equal rate of pay (including benefits) for “substantially similar” work. The determination that work is “substantially similar” will be based upon a composite of factors, which the amendments identify as “skill, effort, and responsibility.” Notably, comparisons of pay rate differentials can be based upon pay rates in any of an employer’s operations or facilities. In addition, pay equity claims may be brought on the basis of all protected characteristics, including race, ethnicity, disability, age, and gender.
The amendments further provide that a violation of the law occurs each time an employee is affected by a discriminatory compensation decision or practice (that is, each paycheck). The amendments enhance anti-retaliation provisions and also require employers that enter into contracts with public bodies under which they provide services to file reports with the Commissioner of Labor that set forth information regarding compensation and hours worked, with reference to gender, race, ethnicity, and job category.
Meanwhile, Vermont’s upper and lower legislative chambers passed a bill (HB 294) restricting salary history inquiries. Earlier this year, Governor Phil Scott endorsed the bill in a letter to the Vermont House Speaker, so he is expected to sign the bill should a final version land on his desk.
Legislators in Hawaii appear to be hammering out their own equal pay measure (SB 2351, HB 2137). Companion proposals in the house and senate would ban salary history inquiries and protect employees’ rights to discuss and inquire about their wages without negative repercussion. Legislative committees are attempting to reconcile the proposals.
By contrast, a federal court in Pennsylvania has enjoined enforcement of Philadelphia's salary history ordinance on constitutional grounds.
Gig Economy: The Rise of “Marketplace Contractor” Laws
Bills explicitly categorizing certain types of gig economy workers as independent contractors under state law have increased over the past year. In April, Tennessee became to the latest jurisdiction to define marketplace platforms and contractors that use those platforms to connect with clients or customers. The bill, SB 1967, clarifies that a “marketplace contractor” is any individual, corporation, partnership, sole proprietorship, or other business entity that:
(A) Enters into an agreement with a marketplace platform to use the platform’s online-enabled application, software, website, or system to be given an assignment, or otherwise receive connections, to third-party individuals or entities seeking its services in this state; and
(B) In return for compensation from the third-party or marketplace platform, offers or provides services to third-party individuals or entities upon being given an assignment or connection through the marketplace platform’s online-enabled application, software, website, or system.
Provided certain conditions are met, the marketplace contractor “is an independent contractor, and not an employee, of the marketplace platform for all purposes under state and local laws, rules, and ordinances.”
Relatedly, a bill pending in California (AB 2765) would amend the Fair Employment and Housing Act (FEHA) to prohibit a digital marketplace from discriminating on the basis of a protected classification. This bill would also authorize digital marketplaces to contribute to a marketplace contractor benefit plan.
The Golden State is also considering a spate of bills aimed at curbing sexual harassment. Pending proposals include added training requirements, records retention obligations, and restrictions on non-disclosure agreements. Other measures in California would require certain employers to reasonably accommodate medical marijuana users and to submit an employee pay data report annually, modelled after the previously-proposed (but now-scuttled) revisions to the EEO-1 report.
To the east, both the New York State Legislature and the New York City Council recently adopted new legislation targeting sex discrimination and sexual harassment in the workplace.2 State lawmakers inserted a number of sexual harassment-related initiatives in the state’s 2018-2019 budget, which Governor Andrew Cuomo signed on April 12, 2018. Key measures include: (1) mandatory sexual harassment training and a written policy for all employers, effective October 8, 2018; (2) broadened protections for non-employees, imposing potential liability on employers for harassment of contractors and consultants, effective April 12, 2018; (3) affirmations of compliance by state government contractors, effective January 1, 2019; (4) prohibition of arbitration clauses as to sexual harassment allegations, effective July 11, 2018; and (5) restrictions on the use of non-disclosure agreements, also effective July 11, 2018. The New York City Council, for its part, passed a package of 11 bills relating to sexual harassment, which Mayor Bill de Blasio is expected to sign into law in the coming weeks. Fortunately for New York City employers, many of the requirements overlap with the new state provisions. Highlights include an extended statute of limitations for gender-based harassment and a notice and poster requirement.
A measure that would prohibit public and private employers from requiring employees to sign non-disclosure agreements advanced in April in Tennessee (HB 2613, SB 2328). The ultimate fate of the bill remains uncertain, should the proposal reach the desk of Republican Governor Bill Haslam.
Employers with operations in Massachusetts, as well as in San Francisco, California, should take note that both jurisdictions recently amended their ban-the-box regulations.3 In 2010, Massachusetts enacted the Criminal Offender Record Information (CORI) Reform Act, which prohibits an employer from requiring an applicant to check a box if he or she has a criminal history or to disclose certain types of criminal history information. Additional restrictions, approved on April 13 by Governor Charlie Baker (SB 2371), take effect on October 13, 2018. The amendments impose a notice requirement and preclude employers from asking about convictions that are three years old or older, or about sealed or expunged criminal records.
Also on April 13, 2018, San Francisco amended its Fair Chance Ordinance (FCO), effective October 1, 2018. This revision broadens current limitations by forbidding employers from considering any conviction “that arises out of conduct that has since been decriminalized since the . . . date of sentencing.” The FCO amendment specifically refers to the state laws governing the personal possession, cultivation, and use of cannabis as an example of the type of conviction that cannot be considered by San Francisco employers.
Leaves of Absence
In late April, New Jersey Governor Phil Murphy tweeted that he would sign a new sick and safe leave bill on May 2, 2018.4 This state-wide paid leave bill will preempt the current patchwork of 13 local paid sick leave ordinances. In general, the measure will allow employees to accrue an hour of leave for every 30 hours worked, up to a maximum of 40 hours per year. Up to 40 hours may be carried over from one benefit year to the next. Leave may be used on the 120th calendar day after employment begins (unless an employer permits use earlier) and may be taken for multiple reasons, such as: (1) care of a physical or mental illness; (2) services or legal proceedings for victims of domestic or sexual violence; (3) closure of the place of business or a child’s place of care due to public health emergency; and (4) attendance at school-related functions. The bill also obligates employers to display a state-created posted and maintain related records.
On the opposite coast, Washington state issued proposed rules in April related to its Family and Medical Leave Program. This insurance program, which will begin in 2020, will be funded by premiums paid by both employees and many employers, and will be administered by the state Employment Security Department. Among other things, the proposed rules address how an employer’s size affects liability for premiums and eligibility for small business assistance grants, how the department will assess employer size, when employer premium payments are due, and what are the employer application requirements for voluntary plans.
A Colorado proposal (HB 1001) that would institute a similar family and medical leave insurance program passed the house and moved to the senate for further consideration. And lawmakers in Hawaii continue exchanging drafts of a paid sick leave bill (HB 1727, SB 2359) between the two chambers.
At the local level, the Duluth, Minnesota City Council approved several amendments to its proposed Earned Sick and Safe Time Ordinance. Under the latest version of the ordinance, covered employees in the city would be entitled to earn one hour of paid time off for each 40 hours worked. The bill is scheduled for further consideration on May 14.
Not all paid leave bills will be destined for success. The New Hampshire senate, for example, voted to further study a measure that was intended to create a state-run paid family and medical leave insurance program, rather than simply approving it.
Wisconsin’s AB 748 was signed into law on April 16, 2018.5 This expansive preemption bill generally prohibits “local government units” (including cities, villages, towns, counties, and other political subdivisions) from enacting or enforcing ordinances creating employer obligations related to employee hours, overtime and scheduling; benefits; salary history; wage payment, claims and collections; professional licensing and certification; and labor-management relations. Michigan similarly beefed up its preemption statute at the end of March.6
Wage and Hour
Along with these hot topics, wage and hour issues continue to dominate lawmakers’ attention across the nation. Readers interested in more detail on that subject are encouraged to consult WPI Wage Watch, a Littler feature focusing exclusively on breaking minimum wage developments.7