Released January 11, 2024

LEGISLATIVE NEWS

  • As 2024 rolls in, a host of California labor laws go into effect, including: employee leave for reproductive loss, a rebuttable presumption of retaliation when adverse actions happen within 90 days of employee protected activity, new rules about marijuana and the workplace, and increased penalties for employee misclassification as an independent contractor.
  • 2023 brought several additional protections for pregnant and breastfeeding employees, with the primary change being the federal Pregnant Workers Fairness Act (PWFA) going into effect. Additionally, the federal PUMP Act, along with several state laws, expanded the rights of employees who pump breastmilk while at work.
  • Colorado’s Protecting Opportunities and Workers’ Rights Act (POWR Act) makes several changes to the state’s antidiscrimination law. The definition of harassment has been expanded, evidence of severity or pervasiveness is no longer required, and marital status has been added as a protected category, as well as several other changes. The law, which went into effect August 2023, significantly increases employers’ obligations to prevent and address harassment and discrimination.
  • In 2023, Maine became the latest state to provide for individual liability for sexual harassment, meaning that victims of sexual harassment in Maine can now sue individual employees, officers, supervisors, or directors who engaged in the harassment. Maine joins California, Connecticut, Massachusetts, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Washington in providing this right to employees.
  • Finally, while 2023 brought a number of significant changes to the employment landscape, a look ahead to 2024 shows that more changes can be expected in the upcoming year. Minimum wage increases and minimum salary thresholds for overtime exceptions likely will continue to rise. The EEOC is expected to finalize its first updated harassment guidance since 1999. Governmental bodies will continue to grapple with how to best regulate artificial intelligence (AI).

California Continues to Expand Employee Rights with New Laws Effective January 1, 2024

As of January 1, 2024, a number of laws became effective in California which expand employee rights and protections.

  • Reproductive Loss Leave. California’s SB 848, effective January 1, 2024, mandates up to five days of unpaid leave for eligible employees following a “reproductive loss event.” This includes failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The law applies to any employer with at least five employees (or government-sector employers of any size) and any California employee employed for at least 30 days before commencement of the leave. Unlike other leave laws, this law does not contain a provision allowing employers to request documentation related to the loss. Employers must maintain confidentiality. Leave can be taken on an intermittent basis, but it must be completed within three months. If an employee experiences multiple reproductive losses in a 12-month period, an employer is only required to provide a maximum of 20 days of leave. Employers’ existing leave policies will determine whether the leave is paid or unpaid.
  • Rebuttable Presumption of Retaliation. Effective January 1, 2024, California’s SB 497 introduces a rebuttable presumption of retaliation to aid employees in establishing retaliation claims. This amendment to the California Labor Code creates a presumption of retaliation in favor of the employee, if an adverse employment action occurs within 90 days of protected activity, simplifying the initial legal burden for employees when making a retaliation claim. Protected conduct includes discussing wages or complaining about workplace issues. Employers facing such claims must then present a legitimate, non-retaliatory reason for their actions. SB 497 also imposes a civil penalty of up to $10,000 per employee per violation, in addition to other remedies, with the seriousness of the violation determining the penalty. This change strengthens employee protections and increases the stakes of retaliation in the workplace.
  • Marijuana and the Workplace. Starting January 1, 2024, two bills go into effect regarding marijuana and the workplace. First, under SB 700, California employers are prohibited from requesting information about past marijuana use by a job applicant. Second, AB 2188 makes it illegal for an employer to discriminate against or penalize a person in hiring, termination, or any other aspect of employment for (1) off-duty cannabis use that occurs away from the workplace; or (2) non-psychoactive cannabis metabolites found in drug screening tests. The laws don’t interfere with an employer’s right to maintain a drug-free workplace, and exceptions exist for certain industries. It is also not illegal to make employment decisions based upon valid pre-employment drug screening methods that do not detect non-psychoactive cannabis metabolites.
  • Increased Penalties for Employee Misclassification. Starting January 1, 2024, California’s Labor Code Section 226.8 significantly increases penalties for misclassification of employees as independent contractors. Aimed at curbing willful misclassification and improper fees, the law imposes civil penalties ranging from $5,000 to $15,000 per violation, with potential increases to $10,000-$25,000 in cases of a pattern or practice of violations. These penalties, which are in addition to other fines, would be issued against businesses that charge fees or make illegal deductions from misclassified individuals’ compensation. Violators are also required to prominently display a notice on their website for a year, acknowledging willful misclassification and detailing business changes made to prevent further violations.

The above list is not exhaustive. For example, California also increased the mandatory number of sick days from three (3) to five (5). Also, California’s Workplace Violence Bill (which was detailed in the October 2023 Brief) will become effective July 1, 2024.

Pregnant and Breastfeeding Employees See Increased Protections from 2023 Laws

In 2023, several laws, such as the Pregnant Workers Fairness Act (PWFA) and the PUMP Act (Providing Urgent Maternal Protections for Nursing Mothers Act), have significantly enhanced protections for pregnant and breastfeeding employees. While technically passed in 2022, but not effective until June 2023, the PWFA requires employers with at least 15 employees to provide reasonable accommodations related to pregnancy, childbirth, or related medical conditions. The Equal Employment Opportunity Commission (EEOC) enforces the PWFA and has issued guidance and resources on the new law. The EEOC most recently proposed regulations that further define its scope, expanding coverage for pre- and postpartum conditions and protections for qualified employees unable to perform essential job functions temporarily. For more details, see the July 2023 and November 2023 issues of the Brief.

In addition, the federal PUMP Act mandates employers to offer reasonable break time and a private space for expressing breast milk to all employees for up to one year after their child’s birth. The PUMP Act addresses gaps in prior protections under the Fair Labor Standards Act (FLSA), expands coverage to more employees, provides new legal remedies, and more. The law emphasizes the importance of creating suitable and private spaces for pumping (other than a bathroom), away from view and intrusion.

Several states including New York, Minnesota, and California passed laws which similarly expanded rights for pregnant and breastfeeding employees.

All of these legislative changes represent lawmakers’ interest in protecting the rights and well-being of pregnant and breastfeeding employees, providing clear guidelines for employers, and enhancing workplace accommodations.

Colorado’s POWR Act Highlights 2023 Legislative Session

         As previously detailed in the July 2023 edition of The Brief, Colorado’s most significant legislative development in the employment law space was the enactment of the Protecting Opportunities and Workers’ Rights Act (POWR Act), which is now officially in effect as of August 7, 2023. The legislation brings substantial changes to the state’s workplace harassment laws, nondisclosure provisions, and overall employment regulations, including:

  • Redefining harassment in Colorado, eliminating the requirement for conduct to be “severe or pervasive” to be deemed illegal. Instead, the focus is on conduct that is subjectively offensive to the individual and objectively offensive to a reasonable person in the same protected class.
  • Limiting employers’ affirmative defenses to harassment claims, particularly those involving supervisor harassment.
  • Requiring employers to establish programs designed to prevent and deter harassment, promptly address complaints, and effectively communicate the complaint and investigation process to both supervisors and nonsupervisory employees.
  • Adding “marital status” as a protected class under Colorado employment law.
  • Making nondisclosure agreements (NDAs) that limit an employee’s ability to disclose alleged discriminatory or unfair employment practices void, unless they meet certain conditions.
  • Implementing new record-keeping obligations, including maintaining personnel and employment records for at least five years and keeping a designated repository for written and oral complaints of discriminatory or unfair employment practices.

For more details about the above changes to Colorado law, please see the full story in the July issue of The Brief. 

Maine Allows Victims of Sexual Harassment to Personally Sue Individuals Involved

Maine’s 2023 legislative session included three bills which expanded workplace protections for employees. These bills were detailed in the August edition of The Brief and included (1) the enactment of a bill that would provide for individual liability for supervisors, officers and directors who engage in sexual harassment; (2) the expansion of Maine’s Equal Pay Law to prevent employers from discriminating on the basis of race by paying an employee less than another employee of a different race for comparable work; and (3) increasing the limit on damages employers may be liable for in discrimination lawsuits.

Under one of these bills, L.D. 53, victims of workplace harassment or assault now have the option to take direct legal action against the person who committed the harm. Effective September 19, 2023, Maine’s Act to Ensure Accountability for Workplace Harassment and Assault introduced individual liability for work-related sexual harassment and assault claims. This change means that employees, supervisors, officers, or directors of an employer can now be held individually liable for sexual harassment, sexual assault, or intentional torts related to sexual harassment or assault. This legal shift does not limit or prohibit actions that allege employment discrimination against the employer as well for discriminatory acts by supervisors and other agents.

Maine now joins California, Connecticut, Massachusetts, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Washington as states where perpetrators of sexual harassment may have direct personal liability for their actions.

2024: More Changes to the Employment Law Landscape

Every year brings new actions from legislatures, regulatory bodies, courts, and agencies that necessitate changes to employment policies and practices. 2024 will not be any exception. Several developments are expected to take place in 2024 and undoubtedly, many other developments will be unexpected. Two that can be anticipated are the U.S. Department of Labor (DOL) finalizing its increased minimum salary threshold for overtime exemptions and the U.S. EEOC releasing its first updated harrasment guidance since 1999. Additionally, state and federal regulators have signalled that they will be looking to ensure proper safeguards are in place when it comes to use of artificial intellegence (AI) in the workplace.

The U.S. Department of Labor (DOL) is expected to release a Final Rule on minimum salary thresholds in 2024 following the Notice of Proposed Rulemaking (NPRM) which concluded in 2023 and suggested substantial changes to the Fair Labor Standards Act (FLSA) regarding the so-called “white-collar exemptions.” The proposed rule aims to increase the minimum weekly salary for these exemptions by over 50%, elevating it from $684 to $1,059 (equivalent to an annual salary of $55,068). Additionally, the DOL suggests raising the annualized salary threshold for “highly compensated employees” (HCE) from $107,432 to $143,988. The proposal also includes a provision for automatic updates to these earnings thresholds every three years. If implemented, these changes would significantly impact employee compensation and overtime eligibility.

In October 2023, the U.S. Equal Employment Opportunity Commission (EEOC) issued a Proposed Enforcement Guidance on Harassment in the Workplace, marking the first update to its harassment enforcement guidance since 1999. The proposed guidance outlines legal standards for workplace harassment and employer liability in harassment claims, aiming to replace several older documents. These include Compliance Manual Section 615: Harassment (1987), Policy Guidance on Current Issues of Sexual Harassment (1990), Policy Guidance on Employer Liability under Title VII for Sexual Favoritism (1990), Enforcement Guidance on Harris v. Forklift Sys., Inc. (1994), and Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors (1999). The EEOC accepted public comments until November 2023 and will review them before deciding whether to finalize the enforcement guidance.

Finally, in 2023, there was a notable surge in the utilization and accessibility of AI-enabled software and tools, including in the human resources space. These software programs focused on streamlining hiring processes and other HR-related functions. The beginning of the wave of artificial intelligence used in employment practices has triggered increased attention from both state and federal authorities. Concerns about unintentional biases embedded in AI algorithms and their potential to lead to discrimination against job applicants or employees have prompted signals for heightened regulatory scrutiny in 2024. Recognizing the significance of fair and unbiased AI deployment in the workplace, legislators and regulators are gearing up to address these issues and ensure that AI-driven tools adhere to ethical and non-discriminatory standards.

These are part of the many trends and changes to look out for in 2024.

Disclaimer: this information is not intended as legal advice. Please consult with legal counsel to ensure your organization’s compliance with applicable legal requirements.