Many employers are choosing to use payroll cards as a convenient option to pay wages. Federal law prohibits employers from mandating the use of payroll cards unless employees are permitted to choose between a payroll card and at least one other alternative method to receive wage payment. At least 31 states have laws governing the use of payroll cards, including when written consent to pay wages by payroll card is required, and what disclosures must be made to employees before payroll cards may be used. For example, Illinois requires employers to inform employees that they are entitled to make two declined transactions per month without fee, and North Dakota requires that the payroll card must be issued by a federally insured bank or credit union. Failure to abide by state statutes regarding the proper use of payroll cards may subject an employer to wage and hour claims, as well as applicable fines and fees. Questions on whether your business’s use of payroll cards complies with the laws of your state? myHRcounsel can provide state-specific fact sheets and authorization forms to ensure that your payroll policies are in compliance.
As an employer, have you ever thought about withholding wages from a current or terminated employee? If you answered yes, then there may be potential legal dangers that you are unaware of.
Do I have to pay a terminated employee, and if so, when?
According to the Department of Labor, the “last paycheck” law states that employers do not have to give a former employee their check immediately whether they are terminated or voluntarily resign. Regardless, an employer should pay the former employee for the previous work period at the next regular payday. Many states have more stringent “final paycheck” laws, so it is important to review the local statutes.
Employers may also encounter instances where the terminated worker is still in possession of company property. While the employer may want to withhold a paycheck until the equipment is returned, the FLSA mandates that all wages are due at the next regular payday, regardless of whether or not the property is returned. Again, some states have different requirements, so an employer may have the chance to recoup the cost of the company property that is in the employee’s possession.
Can I withhold pay from a current employee?
Under both federal and state law, employers are required to pay their employees, and each employee must be paid the required minimum wage. For a number of reasons, employers may consider withholding pay from a current employee. Generally speaking, an employer cannot withhold pay from an employee without his or her consent, except in the case of required withholdings, such as FICA. Moreover, withholding wages as means of punishment is against the law. An employee is owed his or her full paycheck even if the employee violates company policy. If an employee is overpaid, the employer is allowed to recoup the overpayment from the employee under the FLSA, as the Department of Labor considers overpayment a “loan or advance of wages.” Some states place restrictions on such recoupment, however, such as time limitations or the requirement for written authorization from the employee.
Withholding pay from current or former employees can create legal problems for an employer. It is always best practice for employers to review both federal and relevant state and local laws to ensure the desired withholding complies with all governing laws. If you have questions, consult an attorney.
On July 17, 2017 the federal government has released a new Form I-9, which is a form that is required to be completed by all new hires to prove eligibility to work in the United States. The Form I-9 has been around since the 1980's and has been updated numerous times. The previous I-9 was released in November, which will expire on September 17th, so employers must switch to the new form which can be found at the link below.
Only a handful of changes were made, including changes to the instructions, as well as adding consular report of birth abroad as an acceptable form of ID to show work eligibility. The form may switch to this new form immediately, or continue to use the former version until September 17, 2017.
To access the new Form I-9, click here...
Governor Jay Inslee officially signed into law a bipartisan plan that will now guarantee eligible workers 12 weeks of paid time off for the birth or adoption of a child, or for a serious medical condition of the worker or worker's family member. This will be effective in 2020. Washington now joins four other states who have paid family-leave programs: California, New Jersey, Rhode Island, and New York. The District of Columbia has a paid family-leave program scheduled to take effect in July 2020.
The bill is one of the most generous in the nation, as low-wage workers may collect at least 90% of their weekly income. Workers may have two additional two weeks for complicated pregnancies.
The law calls for both employers and the employees to pay into the system- where weekly benefits are calculated based on the percentage of the employee's wages and the state's weekly average wage($1,082). The weekly amount paid out is capped at $1,000 per week. To qualify, employees must work at least 820 hours.
Missouri Governor Eric Greitens has announced that he will let a bill that repeals the St. Louis minimum wage law, which will lower the St. Louis minimum wage from $10 to the state law of $7.70 per hour. The Missouri minimum wage is tied to the rate of inflation. The bill will also block cities and counties from setting their own minimum wages in the future, by enforcing a Missouri state-wide standard. Even without the Governor's signature, the law is set to take effect on August 28, 2017.
Workers in St. Louis were currently making $10 per hour as of May, plus the minimum wage was due to rise to $11 per hour in January 2018. Governor Greitens cited the $15 minimum wage hike, which he believes(and studies have found) to cost both businesses and the worker money and jobs. Missouri has now joined 17 other states who have preemptive laws, which prohibit local minimum wage legislation.
In May 2016, President Obama and Labor Secretary Perez announced the final rule updating overtime regulations. (We wrote about it in our blog last year, which can be found here). The rule was significant for businesses because an estimated 4 million people were set to receive overtime protections within the first year of implementation. Just a few days before the implementation date of the new rule, a Federal Judge in Texas placed an injunction on the rule, blocking it from taking effect. Since then, the DOL has delayed the overtime rule three times, with the final delay ending June 30, 2017.
Just this week, President Trump's DOL has dropped the defense of the FLSA overtime rule. The eligibility threshold would have been raised from $455 per week($23,660 annually) to $913 per week ($47,476 annually). While the DOL dropped the defense of the rule, the agency requested that the 5th Circuit not address the validity of the $47,476 threshold, which the DOL intends on revisiting through new rule making. That process began on June 27 with a public request for information. While many feel that the original $23,660 threshold is out of date, many believed that $47,476 went too far. Alexander Acosta has yet to publicly state his plans.
Continue to follow myHRcounsel for all the updates on the overtime rule!
In a ruling on May 18, 2017, U.S. District Court judge Joseph F. Leeson, Jr. of Pennsylvania ruled that a transgender woman could move forward with a sexual discrimination lawsuit against an employer under the Americans with Disabilities Act (ADA). Currently under law, the ADA explicitly excludes transgender individuals from any protections. This marks the first time ever that a transgender person will be able to sue under the ADA.
Judge Leeson Jr. avoiding ruling on the constitutionality of the ADA, but he found that the case could go forward as the ADA is designed to give people with disabilities the right to pursue discrimination claims. However, being transgender is not considered a disorder, but it can give rise to what is known as gender dysphoria, which is a type of anxiety- which may require medical treatment. The Judge ruled in the plaintiff’s favor due to gender dysphoria, as the plaintiff claimed that they were fired after a pattern of harassment which included of her being denied use of the women’s bathroom, and being forced to use a name tag which had her male name given at birth.
On Tuesday May 30th, Governor Mark Dayton signed a 10 budget bills, but among them was a provision that prohibited cities from banning any type of bag- whether that means paper, plastic, or reusable. This took effect Wednesday May 31, which means the Minneapolis plastic bag ban will no longer take effect today June 1, 2017. The City Council still hopes to implement some of the provisions of the bill.
Also important to note is that Governor Dayton did not sign the "pre-emption bill" whcih would have blocked the paid sick-leave ordinance or the proposed $15 minimum wage.
Effective June 1, 2017, businesses in Minneapolis will no longer be allowed to provide plastic bags as a carry out option. This was passed by the Minneapolis City Council, who voted 10-3 in April. The goal of the ordinance is to reduce litter, waste, and the environmental impact that plastic bags have. The ordinance states that:
a. Retail establishments may not provide plastic carryout bags
b. Retail establishments may only provide recyclable bags to customers, compostable bags, or bags that are designed to be used multiple times
c. If a retail establishment is to provide a bag, the establishment must charge at least $.05 per bag(or choose to take on this cost on their own). Those customers who receive food assistance are exempt from the charge.
City Councilman Cam Gordon has stated that Minneapolis will not enforce the ban, likely not until the next year. This ordinance does have a few exemptions, for example: take-out food, newspaper bags, dry cleaning bags, and some grocery items.
For any support with this ordinance, contact us at myHRcounsel
With a number of sick leave laws already in place, the latest batch of sick leave laws are schedule to take effect this July. Employers in the following cities and states should take the time to review current policies to make sure they are compliant with the changes on the effective date, or you could face penalties! For any assistance in implementing the changes in policies to reflect the new laws, contact us at myHRcounsel. As a reminder, a handbook update is included in our services.
Arizona (Effective July 1, 2017)
Arizona residents passed Proposition 206 in November 2016, which is known as the “Fair Wages and Healthy Families Act.” Under the act, it raised the minimum wage (effective January 1, 2017) and added a state-wide sick leave law (effective July 1, 2017). Arizona has become the sixth state to pass a sick leave law. Under the law, employees must accrue at least one hour of paid sick leave time per 30 hours worked. For businesses with 15 or more employees, employers must allow the employees to accrue and use up to 40 hours of paid sick time per year. For employers with less than 15 employees, the number goes down to 24 hours.
Chicago/ Cook County, IL (Effective July 1, 2017)
The Chicago paid sick leave ordinance covers all employers that maintain a business within the Chicago city limits, or are subjected to one or more of the city’s licensing requirements. Under the law, employees may accrue up to 40 hours of paid sick leave per year- at the rate of 1 hour of paid sick leave for every 40 hours worked. Additionally, employees can carry unused sick leave hours across years.
The Cook County ordinance is largely the same as Chicago’s, however several municipalities have opted out: (Barrington, Bedford Park, Mount Prospect, Rosemont, Tinley Park, and Oak Forest.
Minneapolis and Saint Paul, Minnesota (Effective July 1, 2017)
The Minneapolis paid sick leave ordinance requires employers with at least 6 employees to provide paid sick and safe leave time to employees who work in the Minneapolis city limits. The ordinance requires that employees accrue one hour of sick leave for every 30 hours worked, for up to 48 hours of sick leave per year.
The Saint Paul Ordinance is similar to the Minneapolis ordinance, however it is mandated to all employers with no minimum amount of employees. The effective date however is due to the amount of employees. For employers with 24 or more employees, it is effective July 1, 2017. Employers with 23 or fewer employees have an additional year to prepare and it is effective July 1, 2018.
Los Angeles (Effective July 1, 2017)
Last June, the Los Angeles City Council passed an ordinance which mandated paid sick leave beyond the requirements required by the state of California's "Healthy Workplaces, Healthy Families Act of 2014." For employers with more than 26 employees, this ordinance took effect July 1, 2016, however for businesses with 25 or fewer employees, this is effective on July 1, 2017. Under this ordinance, employees will accrue up to 1 hour of paid sick leave for every 30 hours worked, with any unused time allowed to be carried over. An employer will have the right to cap the paid leave at a minimum of 72 hours however.
The Los Angeles Minimum wage is also rising on July 1, 2017. Employers with 26 or more employees must pay a minimum of $12.00 per hour to employees. For employers with 25 or fewer employees, or approved non-profit corporations (with 26 or more employees) may pay a deferred rate of $10.50 per hour to employees.
For a required poster, click here.
Seattle (Effective July 1, 2017)
On September 19, 2016 the Seattle, WA City Council passed the Secure Scheduling Ordinance (CB 118765). The ordinance mandates that large retail and food service employers in the city provide at a minimum of two-weeks notice to employees of their work schedules. If the schedule is altered, employees are due compensation.
California (Effective July 1, 2017)
The California Department of Fair Employment and Housing (DFEH) has passed new regulations which will limit the ability of employers to consider criminal history when making decisions regarding employment. Under the regulations, employers are prohibited from using criminal records in any employment decision if:
a. If the use has an impact on individuals in a legally protected class designated by FEHA, or
b. The applicant or employee able to demonstrate an effective and less discriminatory way of achieving the specific business necessity.
An employer must be able to demonstrate that the consideration or use of a criminal background check is both job related and consistent with business necessity. However, an employee may still prevail if they can demonstrate a less discriminatory policy or practice.
The Missouri Supreme Court has refused to reconsider their decision from late February of this year, which will overturn an injunction that business leaders had sued for. The court decided that the state of Missouri’s minimum wage does not preempt the city of St. Louis from establishing a higher minimum wage. This decision will means that the 2015 St. Louis city wage hike ordinance will go into effect, and all workers in the city will receive a pay of $10 per hour this year, and jumping to $11 per hour in 2018. The minimum wage is set to increase to $10 per hour by next week and all employers should adjust wages to reflect the changes, or face stiff wage & hour violations.
Contact us at myHRcounsel for any questions you may have!