December 12, 2018

The biggest U.S. HR compliance issues of 2018

Leave and scheduling laws, state auto-IRA programs, and more – there was no shortage of legislative changes that impacted the world of work this year. Here, Compliance Counsel Emerson Beishline summarizes this year’s important HR compliance issues.

As we wrap up 2018, it’s time to look back on the year’s major compliance issues in human capital management in the United States. For Canadian compliance updates, check out our most recent posts on legislative changes here.

Leave laws

As expected, leave laws continued to be very popular across the United States in 2018.

Sick Leave

As previously discussed in an blog post earlier this year, paid sick leave is gaining momentum across the U.S. because it gives employees time to take care of their health and their families without fear of losing their jobs or not getting paid.

In 2018, laws or regulations requiring employers to provide sick leave went into effect in Maryland, New Jersey, Oregon, Puerto Rico, Rhode Island, and Washington State, as well as in New York City, San Francisco, CA, Santa Monica, CA, Seattle, WA, and Tacoma, WA.

A sick leave law in Austin, TX that was originally scheduled to go into effect on Oct. 1, 2018 was first temporarily blocked and then later held unconstitutional by a Texas Court of Appeals. It’s unclear what the City of Austin will do, if anything, to revive the law. A similar law passed in August 2018 in San Antonio, TX also has an uncertain future as it is being challenged by various business groups but it is not yet the subject of a lawsuit.

The short-lived sick leave law that went into effect in May 2018 in Prince George County, MD was pre-empted by the state’s own sick leave law. Also, in a last-minute move, Michigan’s Earned Sick Time Act, scheduled to go into effect in March 2019, has been amended by GOP legislators to be less generous to employees.

Paid Family Leave

Paid family leave went into effect in New York State on Jan. 1, 2018. Massachusetts passed a paid family leave law on June 28, 2018, much of which goes into effect in the summer of 2019. Washington paid family leave is set to go into effect on Jan. 1, 2019. 

Related: Paid family and medical leave is trending in the U.S. – here’s what you need to know

Parental Leave

California’s New Parent Leave Act went into effect on Jan. 1, 2018. A parental leave act was passed in Massachusetts in June 2018, with an effective date of Jan. 1, 2021. 

Ontario recently passed Bill 47 which repeals or changes several items from Bill 148, including requirements for leave. Read more details on the chanes, which come into effect on Jan. 1, 2019, here.

Predictive scheduling laws

As we wrote earlier this year, no two scheduling requirements are created alike, but they do share one thing in common: the goal of providing employees (especially low-wage and part-time employees) with more predictable schedules and pay.

As retail and hospitality sector jobs continue to make up a larger part of the economy, lawmakers are becoming interested in ensuring these employees are able to earn a stable living, driving the increased activity we are seeing in this area.

Oregon became the first U.S. state with a predictive scheduling law when it went into effect on July 1, 2018. The new law applies to most employers in retail, hospitality, and food services with 500 or more employees worldwide. Covered employers must provide advance notice of work schedules, minimum rest periods between shifts, pay premiums to employees for schedule changes, and field employee requests for a flexible schedule, among other requirements.

The Philadelphia City Council approved a fair workweek bill on Dec. 6, 2018. If signed by the mayor, the bill will require certain food, hotel, and retail service employers with 250 or more employees and 30 or more locations worldwide to provide many of the same worker protections described above for Oregon.

Fair workweek bills have been introduced in 2018 in jurisdictions like Boston, Chicago, and New York State but none have yet to receive enough traction to pass this year.

Pay disparity laws

This year, we saw lawmakers ramp up their efforts to pass pay disparity laws of all types. Pay disparity initiatives have been enacted in seven U.S. states and two U.S. counties in 2018: California, Connecticut, Hawaii, Illinois, New Jersey, Vermont, Washington, and Suffolk County, NY and Westchester County, NY. However, California, Connecticut, Hawaii, Illinois, and Suffolk County, NY all have effective dates in 2019.

These laws generally use one or more of following three approaches to decrease pay disparities between employees:

  1. Prohibit employers from paying employees differently based on gender and/or some other protected characteristics for similar work.
  2. Ban employers from inquiring about or relying on an applicant’s wage history.
  3. Bans employers from prohibiting employees from, or retaliating against employees who are, discussing their wages with their coworkers.

In other pay disparity-related news, Massachusetts released an Overview and Frequently Asked Questions guidance document on March 1, 2018. The Ninth Circuit Court of Appeals also issued a decision that held that prior compensation cannot be used, either alone or in combination with other factors, to set initial compensation or to justify a compensation differential under the federal Equal Pay Act.

For additional information, refer back to our August 2018 blog post on pay disparity laws across North America here.

Auto-IRA and retirement plan marketplace laws

A few states across the country began implementing auto-IRA retirement savings programs and retirement plan marketplaces in 2018.

Washington’s Retirement Marketplace was launched in March 2018 as the country’s first online marketplace for retirement savings plans. The online marketplace, or portal, gives working individuals and businesses access to affordable plans.

Oregon’s OregonSaves program has been in a phased rollout for employers of certain sizes since Jan. 1, 2018. Oregon is furthest along among other states in implementing its auto-IRA program.

Illinois’s Secure Choice Program went into effect for some of the state’s largest employers in November 2018 and will continue to roll out to smaller employers. Although Illinois Governor Bruce Rauner issued an amendatory veto to make participation in the state’s secure choice program voluntary, the state legislature’s inaction on the amended bill meant that the bill ended up dying. Accordingly, employers will have to fall back onto the original 2014 legislation for guidance.

Although California’s Secure Choice Retirement Savings Program isn’t going to go into effect until July 2020, the state has already issued final rules geared at implementing the program in that state.

Criminal history laws

Across the country, states and localities have sought to pass ban-the-box laws that prohibit employers from asking about criminal history on a job application in a bid to give an individual with a criminal record a better chance at getting a job. Employers may want to pay particular attention to the patchwork of ban-the-box laws, especially as penalties for violations continue to increase.

The following jurisdictions passed ban-the-box laws in 2018 to create or update protections for applicants with criminal records: California, Massachusetts, Pennsylvania, Washington, and Kansas City, MO, Philadelphia, PA, San Francisco, CA, and Spokane, WA.

In September 2018, the U.S. Equal Employment Opportunity Commission (EEOC) reaffirmed that employers should be conducting an individualized assessment based on nine factors prior to rejecting an applicant for his or her criminal history. Of note, a Texas federal district court prohibited the EEOC and the U.S. Attorney General from enforcing this guidance against the state of Texas.

Sexual misconduct laws

In today’s charged atmosphere, and in the wake of the #MeToo movement, lawmakers got tough on sexual misconduct in 2018.

A sexual harassment prevention training program went into effect on Oct. 9, 2018 across the state of New York. New York City now requires employers to display an anti-sexual harassment rights and responsibilities poster in employee breakrooms or other common areas. These same employers are also required to distribute an information sheet on sexual harassment. A proposed ordinance in New York City would require certain nightlife establishments to provide annual harassment training to employees regarding harassment among patrons.

The state of Washington passed a law on March 21, 2018 prohibiting employers from requiring employees to sign a nondisclosure agreement preventing the employees from disclosing sexual assault or harassment. This law went into effect on June 7, 2018.

Vermont passed a law in May 2018 with an effective date of July 1, 2018 that encourages all employers to conduct an annual education and training program on sexual harassment for all employees within a year of the date of hire. The law also prohibits employers from requiring employees to sign an agreement that restricts the employee from reporting or participating in an investigation of sexual harassment. It also places certain recordkeeping and posting requirements on covered employers.

On Aug. 29, 2018, Delaware passed a sexual harassment training law that will go into effect on Jan. 1, 2019. The law also makes employers responsible for sexual harassment of an employee in certain circumstances and places certain notice and posting obligations on the covered employer.

On Sept. 30, 2018, California passed a sexual harassment omnibus bill. Of note, it prohibits settlement agreement provisions that prevent the disclosure of, among other conduct, sexual assault or harassment. The law also makes it unlawful for employers to provide compensation or a promise of continued employment in exchange for a release of a claim or right under the California Fair Housing and Employment Act. The provisions of this omnibus bill go into effect on Jan. 1, 2019.

Another California law, also passed on Sept. 30, 2018, requires covered employers to provide in-person sexual harassment prevention training to employees every two years beginning Jan. 1, 2019.

I-9 audits

As we predicted late last year, employers saw increased enforcement of U.S. immigration laws as the Trump administration sought to make it a top priority. By August 2018, the Immigration and Customs Enforcement division of the Department of Homeland Security had already conducted 5,200 audits compared to 1,360 audits for all of 2017.

In July 2018, a federal district court judge temporarily prohibited the State of California from enforcing portions of AB 450, a controversial new law that prohibited employers from voluntarily consenting to an immigration officer’s request to enter nonpublic areas in a workplace or providing access to employee records without a judicial warrant. The state’s Attorney General’s Office filed a brief with the Ninth Circuit Court of Appeals in November 2018 arguing that the State of California has a right to dictate its own policies. The Ninth Circuit of Appeals has not heard arguments in this case yet.

Increased I-9 enforcement can lead to significant fines and workforce losses if employers are not closely monitoring their hiring processes. Civil penalties for I-9 violations can range from $100 to $1,100 per violation, even when omissions and mistakes are unintended.

Employers should review their hiring procedures and immigration policies to ensure compliance with U.S. immigration requirements relating to employee identification verification and employment authorization. Employers should also take steps to ensure that their employees are not discriminating against individuals on the basis of national origin, immigration status, or citizenship.


Read more compliance and legislation blogs and news here. Get the latest Canadian compliance blogs here.

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.

Emerson Beishline

Emerson is Compliance Counsel at Ceridian with many years of experience in U.S. and international legal research and writing. In his current role, Emerson tracks U.S. and international employment legislation impacting Ceridian products, works closely with development teams to integrate compliance changes into the company’s Dayforce HCM software, and conducts legal research as needed. 

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