Students across the country are heading back to school, but most state legislatures are either in recess or have adjourned for 2019. States that were still in session in August did advance several significant bills, while the action in California is just heating up, and many city councils are still active. Laws addressing discrimination, “wage theft,” and protected leave were the three main themes rounding out the summer. This month’s State of the States discusses new and advancing laws in these and other areas of employment law.

Discrimination & Harassment

Several new state laws addressed discrimination issues in the workplace. One noteworthy discrimination and harassment-related law enacted in August was Illinois SB 75.¹ This sweeping new measure, effective on January 1, 2020, created three new laws and amended existing statutes related to sexual harassment and discrimination. The Workplace Transparency Act prohibits unilateral agreements to arbitrate claims involving discrimination, harassment, and retaliation for complaining about discrimination or harassment. SB 75 also established the Hotel and Casino Employee Safety Act, which, among other requirements, includes a “panic button” provision for hotel and casino workers. The third new law, the Sexual Harassment Victim Representation Act, mandates that union representatives in proceedings related to sexual harassment claims do not represent both the victim and the accused. Finally, SB 75 amends the Illinois Human Rights Act to create mandatory sexual harassment reporting and training requirements.

Illinois also enacted HB 252, which expands coverage of the Illinois Human Rights Act. Specifically, it broadens the definition of "employer" to include any person employing one or more employees, rather than the previous threshold of 15, working in Illinois “during 20 or more calendar weeks within the calendar year of or preceding the alleged violation.” The amendment becomes effective on July 1, 2020.

On August 30, California’s governor signed SB 778 into law, which delays mandatory anti-harassment training deadlines and resolves confusion about retraining requirements for certain employees who already received training in 2018 or 2019.²

Over on the East Coast, New York enacted AB 4204, prohibiting employers with four or more employees from discriminating against an individual based on religious dress or facial hair. The measure amends the Human Rights Law to extend the definition of “sincerely held practice of religion” to include religious attire, clothing, or facial hair, to prohibit employment discrimination on the basis of these characteristics. The law, effective October 8, 2019, also requires that New York employers accommodate employees’ religious attire and facial hair, unless such religious observance would harm the employer’s business operations.  

New Hampshire enacted a law (HB 608) that defines gender identity and expands the law against discrimination based on gender identity to other areas of law prohibiting discrimination. The New Hampshire Law Against Discrimination, enacted in 2018, already prohibited discrimination based on gender identity in employment, housing and public accommodations. HB 608 extends these protections to all New Hampshire laws. The new law defines “gender identity” as a person's gender-related identity, appearance, or behavior, whether or not that gender-related identity, appearance, or behavior is different from that traditionally associated with the person's physiology or assigned sex at birth. The amendments become effective on October 15, 2019.

Finally, Delaware enacted a measure (SB 63) that prohibits retaliatory discrimination in the workplace. The law prohibits retaliation against an individual who either opposed an act or practice unlawful under the public accommodations law; or made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing to enforce the law. The law became effective immediately upon its enactment on August 20, 2019.

Independent Contractor Classification

On August 12, 2019, the California Senate Appropriations Committee briefly considered Assembly Bill 5 (AB 5), the legislature’s purported solution to the California Supreme Court's opinion in Dynamex v. Superior Court.  In Dynamex, the court abruptly changed longstanding law governing worker classification, and exposed thousands of California businesses to potential retroactive liability.³ On August 30, the California Senate Appropriations Committee approved the bill, moving it one step closer to a vote in the full Senate. In another step pointing toward the bill’s passage, California Governor Gavin Newsom (D) publicly announced his support for the measure in an op ed in the Sacramento Bee.⁴  

Wage Theft

Over the summer, several jurisdictions introduced or adopted bills aimed at increasing penalties for violations of wage and hour law, often referred to as “wage theft” laws. In New Jersey, the Wage Theft Law was enacted on August 6, creating robust civil and criminal liability and penalties for nonpayment of wages and for retaliation.⁵ The law includes the addition of an obligation for employers to notify workers of their rights under New Jersey’s wage and hour laws. The Wage Theft Law also increases the statute of limitations for claims of unpaid wages from two to six years and allows liquidated damages of up to 200% of the wages owed. The law also bolsters the state’s anti-retaliation provisions, adding a presumption of retaliation if a negative employment action is taken against an employee within 90 days of a complaint. A new crime, a “pattern of wage nonpayment,” was included as well, along with expanded joint and successor liability. Finally, the Wage Theft Law increased the authority of the Commissioner of Labor in the Wage Collection Section to collect unpaid wages. Nearly all of the law’s provisions took effect immediately upon enactment, except for several provisions related to pattern of wage nonpayment, which will take effect November 1, 2019.

In other wage theft news, the criminal penalties established by Minnesota’s new wage theft law took effect on August 1, 2019.⁶ The Minnesota law includes increased civil penalties and enforcement provisions, such as giving the Commissioner of Labor the authority to inspect workplaces “without unreasonable delay” and the option to obtain a court-ordered inspection if the employer refuses. Similar to the New Jersey law, Minnesota’s law mandates that employers provide written notice to each new employee—including seasonal and temporary employees—regarding pay rates, allowances for meals and lodging, and the employer’s address, among other details.⁷ An employer must have an “intent to defraud” in order for the criminal penalties to apply, which include possible imprisonment of up to 20 years and a fine up to $100,000 for wage theft exceeding $35,000.

Locally, Minneapolis, Minnesota enacted its own wage theft ordinance. In addition to the requirements of the state law, Minneapolis added several provisions that mirror the more comprehensive law in New Jersey. The city ordinance includes posting requirements to provide a prehire notice to new employees and notice to all existing employees on or before January 1, 2020. The ordinance also requires that earnings statements include the number of sick and safe time hours accrued and unused and allows employees to inspect their wage and hour records in a reasonable time and manner. The Minneapolis ordinance adds a rebuttable presumption of retaliation if an employer makes a material change to an employee’s terms of employment within 90 days of an employee’s allegation of unpaid wages. The ordinance becomes effective on January 1, 2020.⁸ Meanwhile, the Minneapolis City Council is working on a proposal to extend these new wage theft protections to independent contractors and other nontraditional workers.⁹

Protected Leave

Laws providing employees with protected leaves of absence remain a hot topic.

Domestic Violence

New York amended its human rights law on August 20 with new legislation (SB 1040) that prohibits employers from discriminating against victims of domestic violence. The amendments also require employers to provide victims of domestic violence with reasonable accommodations, including allowing such employees a “reasonable time” to seek medical treatment, psychological treatment, or legal or social services. The law will become effective on November 18, 2019.

Puerto Rico enacted a new law that provides employees with 15 days of unpaid leave per year for instances of gender or domestic violence, abuse of minors, sexual harassment in employment, sexual assault, lewd acts, or aggravated stalking.¹⁰ The leave statute applies to public and private employers. The domestic violence leave also extends to family members, and allows employees to request reasonable accommodations, or flexible work conditions, to address these situations. Employees may request to take this leave through apportioned, flexible, or intermittent schedules.

Paid Family and Medical Leave Insurance Program

On August 9, Oregon enacted a comprehensive paid Family and Medical Leave Insurance Program (FMLIP).¹¹ Under the FMLIP, employees in Oregon will be eligible for up to 12 weeks of paid family, medical, and safe leave benefits for qualifying leave. The law establishes a new benefit insurance fund, administered by the state’s Employment Department, to which employers with 25 or more employees must make joint contributions. Payroll contributions and employer notifications to employees begin January 1, 2022, and employees may begin using leave benefits January 1, 2023. 

Pennsylvania lawmakers introduced a bill (HB 1739) in August to create a similar program. The bill would establish an insurance program for paid family and medical leave time that would be funded through employee payroll contributions. The legislation is currently before the House Labor and Industry Committee.

Earned Paid Time Off

On August 20, 2019, the Bernalillo County, New Mexico Commissioners enacted the "Employee Wellness Act," which, though originally styled as a paid sick leave law, as amended requires covered employers to provide paid time off that employees can use for any reason. The ordinance, effective July 1, 2020, applies to employers that must apply for a county business registration with at least two employees and a physical premise in the county's unincorporated limits. Earned paid time off (EPTO) begins to accrue on an employee’s 90th day of employment or on the law's effective date, whichever is later, and accrues at a rate of one hour per every 32 hours worked. Employees can use EPTO for any reason and there is no cap on the amount of leave they can use within a year.¹²

Albuquerque, New Mexico is considering adopting Bernalillo County’s ordinance. At least two city counselors have advocated adopting the paid leave measure to give employers consistency across the city and county.¹³ The city is currently studying the economic impact of doing so.

In the on-going saga of Texas local leave ordinances, the state has joined the lawsuit to enjoin the Dallas sick leave ordinance. Attorney General Ken Paxton joined the group challenging the Dallas ordinance, stating that setting amounts of minimum sick leave and other paid leave is the exclusive right of the Texas legislature.¹⁴

Hiring

Illinois enacted multiple laws in August, two of which touched on hiring practices. The first, HB 2557, provides that an employer that asks applicants to record video interviews and uses an artificial intelligence (AI) analysis of applicant-submitted videos must notify each applicant in writing before the interview. Employers must describe how the AI works, how it is used, and must ask for consent from applicants to apply the AI program. If the applicant does not consent, the employer may not use the AI analysis. The employer is required to keep videos confidential and must delete interviews at an applicant’s request. This measure was enacted on August 9, but will not become effective until June 1, 2020. 

Another Illinois law (HB 3394) requires corporations to annually report to the Secretary of State on the criteria they seek in board of directors members and the current make-up of their board members by January 1, 2021. Governor JB Pritzker signed the bill on August 27, and it became effective immediately. Governor Pritzker said that the legislation would help large businesses in the state create a more diverse and representative group within their leadership, which will increase growth and help working families.¹⁵

What’s Next?

As we near the end of summer, most state legislatures are winding down or already in recess. All eyes will now turn to California, which is in its legislative home stretch and will be rushing to complete legislative business. Littler will continue to bring you legislative developments as they arise.