The year 2021 continues the trend of increasing regulation of the workplace by state and local governments. Although it is not possible to discuss all state and local laws, this update provides an overview of recent and upcoming legislative developments to help you and your organization stay in compliance. (Please note that developments specifically related to minimum wage rates and COVID-19 are not included.)
IRS 20-Factor Test for Independent Contractors: With an implementation date of July 1, 2021, changes to Alabama’s Industrial Relations and Labor Code will require an employer or state agency responsible for determining the employment status of an individual to use the Internal Revenue Service’s 20-Factor Test regarding (1) eligibility for employee benefits and protections, and (2) determining tax liability for employees and employers. Additionally, the employer or state agency must also apply the federal safe harbor provisions, protecting employers that reclassify independent contractors as employees during an audit.
Legalization of Medical Cannabis: Effective May 17, 2021, the Compassion Act provides certain legal protections for users of medical cannabis and for employers. Elements of the Act of particular interest to employers are that the law does not:
- require any employer to permit, accommodate or allow the use of medical cannabis, or to modify any job or working conditions of any employee who engages in the use of medical cannabis or for any reason seeks to engage in the use of medical cannabis;
- prohibit any employer from refusing to hire, discharging, disciplining or otherwise taking an adverse employment action against an individual with respect to hiring, discharging, tenure, terms, conditions or privileges of employment as a result, in whole or in part, of that individual’s use of medical cannabis, regardless of the individual’s impairment or lack of impairment resulting from the use of medical cannabis;
- prohibit or limit the ability of any employer from establishing or enforcing a drug testing policy, including, but not limited to, a policy that prohibits the use of medical cannabis in the workplace or from implementing a drug-free workforce program; or
- prohibit or limit any employer from adopting an employment policy requiring its employees to notify the employer if an employee possesses a medical cannabis card.
Guns in Parking Lots Law: Effective July 30, 2021, Arkansas law regarding the transport and storage of firearms in employers’ parking lots is amended. The new law maintains that a private employer may not prohibit an employee from transporting or storing a legally owned firearm in the employee’s private motor vehicle in the private employer’s parking lot nor prohibit or attempt to prevent an employee from entering the parking lot of the private employer’s place of business because the employee’s private motor vehicle contains a firearm. The substantive change is that while an employee is still required to store the firearm out of sight in the locked vehicle, it does not now need to be stored in a locked personal handgun container designed for the safe storage of a handgun.
Direct Sellers: Effective July 30, 2021, direct sellers (as defined under federal law as it existed on January 1, 2021) are exempt from Arkansas’s wage and hour law, workers’ compensation law and unemployment insurance law.
For information regarding new California laws for 2021, please refer to our firm’s legal update on the subject.
Independent Contractors New Hire Reporting: Effective July 1, 2021, the term “Employee” includes a self-employed or contracted employee for whom the employer is required to report compensation to the federal Internal Revenue Service, and the employer must submit the required information to the state directory of new hires.
Colorado Anti-Discrimination Act (“CADA”): Effective September 11, 2021, CADA is amended to include gender identity and gender expression as a basis for discrimination. “Gender expression” means an individual’s way of reflecting and expressing the individual’s gender to the outside world, typically demonstrated through appearance, dress and behavior. “Gender identity” means an individual’s innate sense of the individual’s own gender, which may or may not correspond with the individual’s sex assigned at birth. Additionally, the definition of “sexual orientation” has been changed from “an individual’s orientation toward heterosexuality, homosexuality, bisexuality, or transgender status or another individual’s perception thereof” to “an individual’s identity, or another individual’s perception thereof, in relation to the gender or genders to which the individual is sexually or emotionally attracted and the behavior or social affiliation that may result from the attraction.”
Recreational Cannabis: On June 22, 2021, Connecticut enacted the Act Concerning Responsible and Equitable Regulation of Adult-Use Cannabis, which permits individuals 21 and older to possess and use recreational cannabis. Effective July 1, 2021, employers may implement a written policy prohibiting cannabis possession, use or consumption by employees, except for qualifying medical cannabis patients, provided it is disseminated to its employees prior to the enactment of the policy (or to prospective employees at the time the employer makes an offer or conditional offer of employment to the prospective employee). An employer may not take adverse action against employees who use cannabis outside of the workplace, unless such action is made pursuant to such a written policy or doing so would cause the employer to violate a federal contract or lose federal funding.
Paid Family Medical Leave Act: Connecticut is in the process of implementing amendments to the Paid Family Medical Leave Act, which will become available beginning January 1, 2022. Of note this quarter is that as of July 1, 2021, an employer must provide written notice of PFML rights to all new employees at the time of hiring and annually thereafter.
Expanded Sexual Harassment Prevention Training: By July 20, 2021, employers must provide compliant sexual harassment prevention training to all supervisors; additionally, any employer with three or more employees must provide the training to all employees. An employer is exempt if it has provided compliant training and education to covered employees after October 1, 2018.
Salary Range Disclosure: Effective October 1, 2021, Connecticut employers must disclose salary range information to applicants and existing employees when they change positions. HB 6380 requires employers to provide an applicant with the salary range for the position for which the applicant applies upon the earlier of (A) the applicant’s request or (B) prior to or at the time the applicant is made an offer of employment.
Nursing Mother Rooms: Effective October 1, 2021, a nursing mother room must meet the following requirements: (1) it must be free from intrusion and shielded from the public while the employee expresses milk; (2) it must include or be situated near a refrigerator or employee-provided portable cold storage device in which the employee can store milk; and (3) it must have access to an electrical outlet.
Voting Leave: Employers must provide employees with two hours of unpaid time off to vote on the day of an election during voting hours. The employee must request the time off not less than two working days before the election.
Repeal of Department of Labor and Industrial Relation’s Authority to Authorize Subminimum Wages: Approved and effective June 16, 2021, the Hawaii DLIR director may no longer issue authorization for an employer to pay subminimum wage to individuals whose earning capacity is impaired by old age or physical or mental deficiency or injury.
For information regarding noncompete and nonsolicitation agreements, please refer to our firm’s legal update on the subject.
Pregnancy and Childbirth Accommodations: Effective July 1, 2021, for employers with fifteen or more employees, an employee may request from her employer, in writing, an accommodation relating to the employee’s pregnancy, and the employer must provide a response within a reasonable amount of time. Such a request for accommodation does not require the employer to provide the accommodation or make an exception to the employer’s policies unless existing state or federal law requires the accommodation be made. An employer may not discipline, terminate, or retaliate against an employee for making a request for or using an accommodation.
Criminalization of Defrauding a Drug or Alcohol Test: Effective July 1, 2021, a person who collects a urine sample from another person for a drug or alcohol test, having knowledge or a reasonable suspicion that the other person has used synthetic urine or a urine additive, is allowed to report such information to law enforcement authorities. The rule applies to a drug or alcohol test given in a private-sector workplace by a public employer.
Expansion of Protections for Military Members: Effective July 1, 2021, Iowa expands its military leave of absence and discrimination protections to any regular, reserve or auxiliary member of the U.S. Coast Guard.
Paid Adoption Leave and Benefits: Effective June 29, 2021, an employer is to afford adoptive parents paid parental leave and other benefits in accordance with employer policies regarding birth parents. This law applies when the adoptive child being received is under the age of 10 years. There are exceptions, and the law does not apply in certain kinship adoptions.
Family and Medical Leave Act Amendment: Expected to fall in September 2021 are amendments to the Maine Family and Medical Leave Act regarding grandparent eligibility for family medical leave as well as emergency responder’s absence from work.
- An employee who is a grandparent will become eligible to request family medical leave to care for a grandchild or domestic partner’s grandchild with a serious health condition.
- Upon receiving notice of an employee’s status as a firefighter or emergency medical services person, an employer may designate the employee essential to the employer’s operations when the absence of the employee would cause significant disruption of the employer’s business. This designation must be made in writing and signed by both the employee and employer. The employee must present the policy of the fire department or emergency medical service provider to the employer within 30 days of notifying the employer of the employee’s status as a firefighter or emergency medical services person.
Prohibition of Direct Deposit Fees: Effective September 15, 2021, an employer may not charge a fee for the payment of wages by means of direct deposit.
Bereavement Leave: With an implementation date of October 1, 2021, this Labor and Employment Act Amendment adds bereavement as a leave that an employee is allowed to use on the death of an immediate family member. Leave with pay that an employee may use includes sick leave, vacation time, paid time off and compensatory time.
Peace Order Law: Effective October 1, 2021, this amendment accommodates for employers to seek the relief of a peace order following certain acts against an employee at the place of employment. The act must have occurred within 30 days before the filing of the petition, and some examples include but are not limited to: assault in any degree, harassment, stalking, certain misuse of telephonic or other electronic means of communication, and trespass.
Of note for employers to be aware of:
- An employer shall notify an employee before an employer files a petition.
- An employer shall be immune from any civil liability that may result from the failure of the employer to file a petition on behalf of an employee.
- An employer may not retaliate against an employee who does not provide information for or testify at a proceeding.
Economic Stabilization Act Amendment: Effective October 1, 2021, broad amendments to reduction in operations rules are relevant to employers. Highlights include:
- “Permanent” means that an employer has not agreed in a written contract to restore operations within three months after the time that the reduction in operations occurs.
- “Reduction in operations” includes the relocation of a part of an employer’s operation from an initial workplace to another existing or proposed site that may reduce the total number of employees at the initial workplace by at least 25% or 15 employees, whichever is greater.
- An employee may not be counted in the determination of a reduction in operations if the employee accepts an offer to transfer to any other site of employment within 30 days after being offered the transfer.
- An employer must provide written notice to the chief elected official of the political subdivision where the workplace that is subject to the reduction in operations is located. If the location falls in more than one, then notice must be provided to the official of the subdivision to which the employer paid the most taxes for the fiscal year immediately preceding the year in which the reduction in operations occurs.
- There is the addition of a list of instances in which the employer is NOT required to provide written notice.
Unemployment Eligibility Restrictions: Effective July 1, 2021, the definition of “unemployment” excludes individuals receiving voluntary payments from employers if those payments equal their regular salary and individuals are on administrative leave. Additionally, the definition of “wages” is to include payments from employers in lieu of an employee’s regular wages. The Department of Employment Security is given authorization to determine if an employer report on contributions due is correct and to assess and negotiate settlements on any past due amounts and interest owed and penalties.
Drug Testing Provision — Unemployment and Workers’ Compensation Laws: Effective July 1, 2021, an employee is disqualified for benefits after being discharged for failure to pass, or refusal to take, a drug test in violation of an employer’s written workplace drug policy, if the testing procedures comply with federal drug testing statutes and regulations. This does not apply to a drug test for marijuana or marijuana products that was administered to an individual who is a registered cardholder. Regarding worker’s compensation injuries, if an employee fails or refuses to take a drug test after the accident and if the testing procedures comply with federal drug testing statutes and regulations, there is a presumption that the major contributing cause of the accident was the employee’s use of drugs not prescribed by a physician, and the employee is not eligible for benefits otherwise payable.
Independent Contractor Certifications: Effective October 1, 2021, these amendments are applying to unemployment insurance and workers’ compensation. An individual may not be determined to be an employee based solely on not having an independent contractor exemption certificate. A person who falsely claimed, either in writing or through credible evidence, to have an independent contractor certification may not be considered to be an employee solely based on not actually having an independent contractor exemption certificate. The burden of proof that an independent contractor is certified rests with the independent contractor and not the hiring entity.
Montana Child Labor Standards Act: Effective October 1, 2021, this amendment adds student-employee to the class of minors provided certain exemptions. A student-employee may perform any work function as required by the occupation so long as:
- The minor is under the direct and close supervision of a qualified and experienced person with experience in the occupation in which the minor is employed.
- Safety instruction is given by the employer of the student-employee.
Fair Employment Practice Act: Effective September 11, 2021, race is inclusive of characteristics such as skin color, hair texture, and protective hairstyles. Protective hairstyles include braids, locks, and twists.
An employer may only enact a bona fide health and safety standard that regulates characteristics associated with race if the employer demonstrates that:
- without the implementation of such standard, it is reasonably certain that the health and safety of the applicant, employee, or other materially connected person will be impaired;
- the standard is adopted for nondiscriminatory reasons;
- the standard is applied equally; and
- the employer has engaged in good faith efforts to reasonably accommodate the applicant or employee.
Kin Care Leave Law: Effective October 1, 2021, if an employer provides paid or unpaid sick leave for the use of employees, an employee is permitted to use any accrued sick leave to assist an immediate family member who has an illness, injury, medical appointment or other authorized medical need to the same extent and under the same conditions that apply to the employee when taking such leave. An employer may limit the amount of sick leave that an employee may use to an amount not less than the amount of sick leave that the employee accrues during a 6-month period. An employer that provides sick leave to employees is to post an explanatory bulletin, as prepared by the Labor Commissioner, in a conspicuous location in each workplace maintained by the employer.
Salary History Inquiries to Job Applicants: Effective October 1, 2021, an employer may not seek the wage or salary history of an applicant. An employer may not rely on wage or salary history information to determine whether to offer employment or the rate of pay for the applicant. An employer may not refuse to interview, hire, promote, discriminate, or retaliate against an applicant who refuses to disclose wage or salary history.
Should an applicant voluntarily and without prompting disclose wage or salary history, the employer is not prohibited from considering or relying on that voluntarily disclosed wage or salary history in determining the rate of pay for the applicant.
Employer Wage and Hour Records: As of June 22, 2021, required wage and hour records may be made, signed, acknowledged, approved and retained electronically.
New Mexico Cannabis Regulation Act: Effective June 29, 2021, this Act legalizes possession and use of up to two ounces of recreational cannabis. Unless there is an agreement between the employer and employee, the Act does not:
- Restrict an employer’s ability to prohibit or take an adverse employment action against an employee for impairment by or possession or use of cannabis at work or during work hours;
- Require an employer to commit any act that would cause the employer to be noncompliant with or in violation of federal law or federal regulations or that would result in the loss of a federal contract or federal funding; or
- Prevent or infringe upon the rights of an employer to adopt and implement a written zero-tolerance policy regarding the use of cannabis products.
New Mexico Human Rights Act: Effective July 1, the Act is amended to include that “race” includes traits historically associated with race, including hair texture, length of hair, and protective hairstyles or cultural or religious headdresses.
- Cultural or religious headdresses include hijabs, head wraps or other headdresses used as part of an individual’s personal cultural or religious beliefs.
- Protective hairstyles include such hairstyles as braids, locs, twists, tight coils or curls, cornrows, bantu knots, afros, weaves, wigs or head wraps.
Cannabis: On March 31, 2021, Gov. Andrew Cuomo signed into law the New York Marihuana Regulation and Taxation Act (MRTA), which amended New York’s protected off-duty conduct law (New York Labor Law § 201-d) to specifically include protections for lawful off-duty use of cannabis in the employment context.
Unemployment Benefits for Military Spouses: Effective August 1, 2021, unemployment benefits will not be denied if a military spouse voluntarily leaves a position to relocate due to their spouse’s permanent change of station orders. Exceptions may apply if the employer attempts to make accommodations.
Reemployment Rights for Servicemembers: While the amendment requires that state law must be consistent with USERRA’s five-year limit on eligibility for reemployment, it also provides exception to the five-year limit on eligibility for reemployment after leave, which excludes the following services from the five-year limit calculation: imposed by law; due to inability of the officer or employee to obtain orders relieving the officer or employee from active duty; voluntary service overseas; or voluntary service within the United States during or in response to an emergency or disaster declared by local, state or federal government. The amendment takes effect 91 days after the current legislative session adjourns, giving it an anticipated implementation of late September.
Living Donor Protection Act: Effective June 28, 2021, the LDPA requires employers subject to the federal FMLA to provide an eligible employee with the same leave to which they are entitled under the FMLA for preparation and recovery needed for surgery related to organ or tissue donation by or for the eligible employee or the eligible employee’s spouse, child or parent.
Restrictive Covenants Ban: Effective July 1, 2021, restrictive covenants for health care providers are banned in South Dakota. The prohibition does not apply to a contract in connection with the sale and purchase of a practice.
Military Leave Law: Effective July 1, amendments relative to employers include:
- A covered servicemember will receive the same employment benefits, privileges and protections regardless of the activation authority or location of service.
- The removal of the maximum 15 days of leave per calendar year requirement, and instead broadly requiring “a leave of absence”.
- National Guard members ordered to state active duty are entitled to the protections and rights provided pursuant to the Uniformed Services Employment and Reemployment Rights Act.
- The removal of the specification that permanent employees must be reinstated to their same position with the same status, pay and seniority.
Overtime Wage Act: Effective July 1, 2021, the Virginia Labor and Employment Code is amended to include the Overtime Wage Act. Of particular interest for employers:
For any hours worked by an employee in excess of 40 hours in any one workweek, an employer shall pay such employee an overtime premium at a rate not less than one and one-half times the employee’s regular rate. An employee’s regular rate shall be calculated as follows: (1) For employees paid on an hourly basis, the regular rate is the hourly rate of pay plus any other non-overtime wages paid or allocated for that workweek divided by the total number of hours worked in that workweek. (2) For employees paid on a salary or other regular basis, the regular rate is one-fortieth of all wages paid for that workweek.
Any action pursuant to this section shall be commenced within three years after the cause of action accrues.
Any employer that violates the overtime wage requirements of this section shall be liable to the employee for all remedies, damages or other relief available in an action brought.
Military Discrimination Protections: Effective July 1, 2021, the Virginia Human Rights Act is amended to replace veteran status with military status as a protected class under antidiscrimination laws. Military status means an individual’s status as a:
- Member of the U.S. uniformed forces or reserves;
- Veteran; or
A dependent is a servicemember’s spouse or child, or an individual to whom the servicemember provided more than half of the individual’s support within 180 days immediately preceding an alleged discriminatory action.
Cannabis Control Act: Effective July 1, 2021, individuals over the age of 21 can lawfully possess up to an ounce of marijuana in Virginia under the Cannabis Control Act.
Relevant to employers, the Act provides that arrest and conviction records for certain marijuana-related offenses will be automatically expunged. Employers are prohibited from asking job applicants to disclose arrests, criminal charges, convictions and civil offenses that have been expunged or are otherwise not open to public inspection, with certain exceptions.
Cannabis Oil Use Protections: Effective July 1, 2021, Virginia law is amended and prohibits an employer from discharging, disciplining or discriminating against an employee for the employee’s lawful use of cannabis oil.
Of note for employers, the amendment does not:
- Restrict an employer’s ability to take adverse employment action for work impairment caused by the use of cannabis oil;
- Restrict an employer’s ability to prohibit possession of cannabis oil during work hours; or
- Require an employer to commit any act that would cause the employer to be in violation of federal law or that would result in the loss of a federal contract or federal funding.
Paid Family Leave Law: Amendments effective July 25, 2021, expand the definition of “family member” to also include any individual who regularly resides in the employee’s home or where the relationship creates an expectation that the employee care for the person, and that individual depends on the employee for care.
Protections for Temporary Workers: Effective July 25, 2021, this new section affords protections for temporary workers placed by a staffing agency with a worksite employer. Not only must the staffing agency appraise the safety of the site’s work environment, but the worksite employer must also:
- Document and inform the staffing agency about anticipated job hazards likely to be encountered by the staffing agency employee;
- Review the safety and health awareness training provided by the staffing agency; and
- Provide specific training tailored to the particular hazards at their workplaces.
The law also prohibits a staffing agency or worksite employer from retaliating against a staffing agency employee who reports safety concerns.
Quarterly Unemployment Reporting: Currently, employers have the option of providing each employee’s standard occupational classification or job title in the quarterly report. As of October 1, 2021, this information is required. An employer that fails to provide this information will face an incomplete report penalty.
Independent Contractor Classification: Effective June 9, 2021, the West Virginia Employment Law Worker Classification Act allows a worker to be classified as an independent contractor rather than employee if the worker: (1) signs a contract that includes certain acknowledgements; (2) either has filed (or is contractually required to file) an income tax return for the fees earned from the work, or provides their services through a business entity; (3) actually and directly controls the manner and means by which the work is to be accomplished, with certain exceptions; and (4) satisfies at least three out of nine criteria that are set forth in the Act.
Workers also may be classified as independent contractors if they meet the federal criteria for direct sellers.
The classification of all workers who do not satisfy the above test will be determined by the IRS 20-Factor Test.