Several significant shifts in federal and state employment laws occurred in the United States on July 1, 2023. Major laws aimed at expanding worker access to leave, increasing wages, and limiting the obfuscation of harassment or abuse by employers have gone into force in several states. Many of these laws deal with issues involving employment and marijuana use, which is now legal for recreational use in 23 states and medicinally in 40 states.
Major legislation has focused on gig workers, an employment sector that has expanded exponentially by Uber, Lyft, DoorDash, and similar disruptors. Some states have enacted minimum payment laws for gig employees, while others are enacting or changing statutes to either affirm or challenge the classification of gig workers as independent contractors — setting up further legal battles.
Let’s take a closer look at some of the major national employment law changes, as well as significant changes in Oregon, Washington, and California.
Not on the West Coast? See if your state is listed below and click to review their July 1st, 2023 employment law changes.
Federal Laws and Proposed Regulations
Federal Trade Commission (FTC) ban on noncompete clauses
The FTC has proposed an outright ban on noncompete clauses, a major change that proponents feel helps workers. Noncompete clauses are binding agreements that prevent workers from moving between companies in the same industry, with the intention of stopping them from sharing proprietary information about their former company with a new one. The proposed ban is being assessed this year, and final agency action on the proposed regulation will occur in 2024.
Pregnant Workers Fairness Act
This law, which went into effect on June 27th, is enforced by the U.S. Equal Employment Opportunity Commission (EEOC). It requires employers to meet their employees’ requests for reasonable accommodations related to pregnancy and any associated health issues. It also protects covered employees from retaliation and denial of job opportunities or being required to take undesired leave by the employer.
State Minimum Wage Increases
A total of 27 states boosted their state minimum wage in 2023. California and Washington had the highest increases, with both raising wages above $15.00 per hour. Oregon raised its minimum wage in line with the current Consumer Price Index (CPI), bringing the minimum up to $14.20 per hour. Click here for a complete list of minimum wage increases.
California Assembly Bill 1949 is a new state law that requires any employer who employs more than five people to provide up to five days of bereavement leave following the death of a family member. The leave is unpaid unless otherwise specified by the employer. However, the law stipulates that a bereaved employee can use other leave, including sick leave, to continue to be paid during their absence. The law also allows employers to request proof of family death from the employee and requires that the leave be taken within three months of the death.
Part of a growing national trend, California’s Senate Bill 1162 requires all employers who employ more than a hundred people to submit payment data reports to the Civil Rights Department (CRD). These reports must break down payment data by “job category, pay band, race, ethnicity, and sex” to provide transparency and expose any discrepancies between groups. The law also expands this reporting to include any contractors whom the company employs, which, in turn, requires contractors to provide all relevant information to their employer to complete the report. Finally, should an employer fail to comply, the CRD is empowered to level fines up to $100 per employee.
Washington Cares Act Implementation
Similar to Social Security, the Washington Cares Act proposes taking 0.58% from the paycheck of Washington residents and putting it towards a fund that provides them with long-term care after retirement. Workers who have been paying into the fund for a certain period can also draw from it earlier, for example after suffering an accident that prevents them from working. Federal employees do not contribute to the fund, and employees of tribal businesses pay only if the tribe has chosen to opt in. Self-employed Washington residents can choose whether to opt in. The act went into effect on July 1, 2023.
Equal Pay & Opportunities Act
Similar in intent to California’s wage transparency legislation, the Equal Pay & Opportunities Act requires Washington employers to disclose a salary range and benefits in their job listings. It also bars employers from seeking out a prospective employee’s past wage during the hiring process. Workers wishing to openly discuss wages and benefits are protected, and the law also provides a list of valid reasons for differences in pay between employees in a similar or the same role. Finally, the law protects employees from retaliation for utilizing any of these rights or filing a complaint with Washington’s Department of Labor & Industries (L&I) Employment Standards Bureau.
Harassment and discrimination settlement limitations
Oregon Senate Bill 1586 expands Oregon’s existing laws barring employers from entering into agreements, such as a severance or settlement, that prevent employees from disclosing workplace discrimination or harassment, such as a non-disparage agreement. The new bill restricts employers from conditioning a settlement on a no-rehire, non-disparage, or nondisclosure agreement (NDA). So, for example, if an employer and an employee agree on a settlement following allegations of harassment leveled by the employee, the employer cannot in any way restrict the employee from discussing the harassment, whether or not a settlement is reached. Please note: These rules do not apply if the employee decides to request a no-rehire, non-disparage, NDA, or other agreement.
We Can Help You Stay Ahead of the Compliance Curve
Acting in accordance with stringent state and federal employment laws can be a huge challenge — one that drains valuable resources from your nonprofit’s mission. One thing is certain: legislatures will make many more changes to employment laws in the future, which makes it all the more important that you are prepared. 501(c) Services’ experienced nonprofit professionals have made it our life’s work to help organizations like yours harness their resources effectively and handle new and evolving compliance needs. If you’d like to learn more about our work and how we can help, get in touch with us.
501(c) Services has more than 40 years of experience helping nonprofits with unemployment outsourcing, reimbursing, and HR services. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy, and we are committed to providing our clients with customized plans that fit their needs.
Please contact us today to see if your organization would benefit from our services.
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(Photo by Airam Dato-on)
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. We want to thank our friends at Littler Mendelson P.C. for providing us with some of this information.