The November mid-term elections resulted in some significant power shifts at the state level. Six states (Colorado, Illinois, Maine, Nevada, New Mexico, and New York) that had been politically divided now enjoy a Democratic "trifecta" – meaning the state house, senate, and governor are all affiliated with the same party.¹ Alaska, meanwhile, whose current governor is an Independent, will have a Republican governor in 2019, making that state solidly red. Four states (Kansas, Michigan, New Hampshire, and Wisconsin) in which the Republican Party had enjoyed a legislative trifecta, are now politically divided.

What does this breakdown mean for employment law? Those states with complete one-party control will be in a better position to enact legislation favored by the controlling party. In 2019, Democratic-controlled states could be more inclined to pass bills mandating paid leave, banning arbitration agreements of sexual harassment complaints, and establishing predictive scheduling requirements, for example. Solidly Republican jurisdictions may favor bills that seek to curb the proliferation of local laws, among others. Politically divided jurisdictions may advance only those measures that enjoy bipartisan support.

This month's State of the States will provide an overview of select voter-approved state and local ballot initiatives that affect employment, and discuss other legislative efforts that made headway in November.

Successful Ballot Measures

While bills to increase the state minimum wage in Arkansas and Missouri failed to advance in 2018, advocates of a higher hourly wage took the issue straight to the voters on November 6. In Arkansas, a ballot measure to boost the hourly minimum wage from $8.50 to $9.25 per hour was approved. Similarly, voters in Missouri agreed to a new $8.60 minimum, up from the current rate of $7.85. Both increases are set to take effect on January 1, 2019.

Legalizing various uses of marijuana was once again a popular election topic. Voters in Michigan approved a measure to legalize the recreational use of marijuana, while Missouri and Utah voters approved proposals to allow marijuana for medicinal purposes.²

Massachusetts voters approved a referendum to uphold Massachusetts SB 2407, which prohibits discrimination based on gender identity in places of public accommodation.

At the local level, voters in Oakland, California approved ballot Measure Z, the "Oakland Minimum Wage Charter Amendment."³ Among other changes, the measure imposes new minimum wages and employment standards for some hotel workers. Specifically, starting July 1, 2019, covered hotel employers must pay employees who receive health benefits from their employer at least $15.00 per hour, and employees who do not receive employer-provided health benefits at least $20.00 per hour. Measure Z also requires covered employers to provide their staff with panic buttons, and restricts the hours, amount of work, and type of work employees must perform. The ballot measure also authorizes the City of Oakland to administratively enforce its employment standards through investigations and penalties, and to create a Department of Workplace and Employment Standards (DWES) to carry out enforcement activities.

Legislative Activities

While most state legislatures will not reconvene until early 2019, many city governments remain active. And some eager state lawmakers have already pre-filed bills to formally introduce in January.

Nondiscrimination

A handful of local jurisdictions are attempting to beef up their nondiscrimination laws. The city council in Beachwood, Ohio passed a measure making it unlawful to discriminate against any person on the basis of race, color, religion, military status, national origin, disability, age, ancestry, sex, sexual orientation or gender identity.⁴ Similarly, Prairie Village, Kansas approved a non-discrimination ordinance that would apply to gender and sexual orientation.⁵

By contrast, the City of Laredo, Texas tabled consideration of a similar ordinance that would have extended anti-discrimination protections on the basis of gender identity and sexual orientation.

In New York City, a proposed ordinance would require every nightlife establishment with five or more employees to provide annual training to employees regarding harassment among patrons, in addition to harassment training required by the state and city.⁶ Given the momentum of the #MeToo movement, it is anticipated that bills and ordinances requiring employers to provide some form of sexual harassment training will continue to be introduced in state and city legislatures in the coming year.

Protected Time Off and Accommodations

Some newly enacted paid time off policies are either being re-tooled or may never see the light of day.

In September, the Michigan legislature adopted as law a proposed ballot measure, the Michigan Earned Sick Time Act, which will entitle employees in the state to accrue and use paid sick leave.⁷ As expected, lawmakers are already considering proposals to amend it. Senate Bill 1175, introduced on November 8 and passed by the state senate 20 days later, significantly scales back the paid leave provisions. Among other changes, the bill seeks to reduce from 72 to 36 the number of paid leave hours an employee could use per year; remove the current law's rebuttable presumption that an employer is violating the law if it takes adverse action against an employee within 90 days of that employee's filing a complaint related to the paid leave benefit or opposing a policy or practice that the paid leave law prohibits; shorten from three years to one year the amount of time an employer must maintain records of hours worked and earned sick time; restrict the uses for paid leave; and limit who is considered a "family member" for whom the employee could take sick leave.

In Texas, a member of the state's lower legislative chamber has pre-filed a bill that would essentially prohibit any municipality from adopting or enforcing an ordinance, rule, or regulation that requires employers to provide paid sick leave to employees. The likely impetus for this bill is the adoption of local paid leave ordinances in the cities of Austin and San Antonio, even though both ordinances have a slim chance of ever being implemented. Notably, on November 16, 2018, the Texas Third Court of Appeals effectively killed Austin's ordinance from ever taking effect,⁸ while the nearly identical San Antonio ordinance, set to go into effect on August 1, 2019, is expected to suffer a similar fate.

Similarly, an Albuquerque, New Mexico proposed ordinance that would have required employers to provide an hour of paid sick leave to their employees for every 40 hours worked, has effectively been abandoned. The city council's Finance and Government Operations Committee failed to vote it out of committee, ending its chances for advancing this year.⁹

In other protected time off news, on November 17, 2018, portions of the New York City Administrative Code were amended to require employers in New York City with four or more employees to: (1) provide designated lactation room(s) for employees; and (2) implement a lactation room accommodation policy.¹⁰ The amendments, which expand upon existing protections for lactating employees, will take effect on March 18, 2019.

Along similar lines, legislation introduced in New Jersey would amend the state's lactation accommodation law to require employers to provide lactating employees with a modified work schedule and a room other than a restroom for expressing milk.

Right to Work

In January 2017, Kentucky enacted a right-to-work law, making it the 27th state in the nation and the last state in the South to adopt such a measure.¹¹ Following a legal challenge, the law was upheld as constitutional by the Kentucky Supreme Court on November 15, 2018.¹²

Marijuana

Although ballot initiatives are common vehicles for introducing laws legalizing recreational and medical uses of marijuana, state legislators continue to push bills to achieve the same end. In New Jersey, a package of marijuana-related bills advanced in late November, although their fate this year is unclear. One bill (SB 2703, AB 4497), which would legalize marijuana for recreational use, has cleared house and senate committees. Another (SB 10, AB 10) would prohibit employers from taking adverse actions against any employee who is a qualified registered patient using medical marijuana.  As with all such laws, the fact that marijuana remains an unlawful controlled substance under federal law raises interesting questions as to how federal and state laws may interact here.

Independent Contractor Analysis

New regulations proposed in Illinois would clarify the factors to be considered in determining whether an individual is an employee or an independent contractor under the state wage and hour laws. Under the current regulation, the Director of the Illinois Department of Labor considers the following factors as significant in making this assessment: (a) the degree of control the alleged employer exercised over the individual; (b) the extent to which the services rendered by the individual are an integral part of the alleged employer's business; (c) the extent of the relative investments of the individual and alleged employer; (d) the degree to which the individual's opportunity for profit and loss is determined by the alleged employer; (e) the permanency of the relationship; and (f) the skill required in the claimed independent operation. The proposed regulations flesh out each of these factors.

Salary History

Even though the year is winding down, localities are still introducing proposals to limit an employer's ability to inquire about an applicant's salary history. In Cincinnati, Ohio, for example, a member of the city council has introduced an ordinance that would ban businesses from making such inquiries.¹³

Suffolk County, New York is the latest jurisdiction to approve a law restricting salary history inquiries. Approved on November 30, 2018, Resolution No. 1856-2018 amends the county code to make it unlawful for any employer to ask job applicants or their former employers about their wage or salary history. This limitation applies to written and verbal inquiries, as well as public record searches. The resolution also makes it unlawful for employers to rely on salary history information in determining the applicant's compensation at any stage in the employment process.

Relatedly, a draft bill in Wyoming for consideration in 2019 would prevent employers from banning compensation discussions. The bill would also prohibit wage nondisclosure agreements as a condition of employment, and prevent employers from taking adverse actions against employees who disclose their wages or inquire about others' pay.

Meanwhile, Oregon issued final rules implementing the Oregon Equal Pay Act of 2017.¹⁴ This law includes restrictions on salary history inquiries, expands existing remedies available to employees, and provides a safe harbor for employers that have voluntarily assessed their pay practices to identify and eliminate discriminatory pay practices.¹⁵ The final rules define a number of key concepts in this law, including what constitutes "work of comparable character," bona fide factors that may be considered in paying employees performing work of comparable character at different compensation levels, and determining benefits as part of compensation. The regulations also clarify that an "unsolicited disclosure" of an applicant's compensation will not be considered a violation of the law so long as the employer does not consider the information in determining his or her suitability for the job.

Minimum Wage

On November 14, 2018, the Saint Paul City Council passed, and Mayor Melvin Carter signed into law, an ordinance that will raise the minimum wage in Saint Paul, Minnesota to $15 an hour starting as early as 2022 for large businesses operating within city limits.¹⁶ For more information on other wage and hour-related updates, see this month's edition of WPI Wage Watch.¹⁷

What's Next?

December is expected to be the quiet before the legislative storm that is expected once state legislatures reconvene in 2019. We will continue to monitor trends and other legislative developments in the new year.