Released June 25, 2024

NEW LAWS ENACTED

  • Connecticut and New York broadened their sick leave laws. Connecticut’s expanded paid sick leave law will be phased in to cover all private sector employers by 2027. New York also expanded its paid sick leave law by requiring employers to provide 20 hours of paid prenatal personal leave for pregnant employees to attend prenatal medical appointments—making it the first state in the nation to provide specific paid leave for prenatal healthcare purposes.
  • The S. Department of Labor issued its final overtime rule, which raises the salary threshold for “exempt” employees under (a) the bona fide executive, administrative, and professional exemptions, as well as (b) the “highly compensated employee” exemption, and provides for automatic, regular updates to the salary thresholds every three years.
  • In a continuing trend, as the workplace use of artificial intelligence tools increases, so do rules and regulations surrounding its use. The U.S. Department of Labor has issued guidance regarding the application of federal labor standards and potential compliance issues that may arise as employers increasingly use artificial intelligence (AI) systems and automated management technologies in the workplace. Similarly, Colorado enacted the “Consumer Protections for Artificial Intelligence” law, which establishes standards and requirements for developers and deployers of artificial intelligence (AI) systems to protect against algorithmic discrimination.

COURT & AGENCY NEWS

  • The S. Federal Trade Commission adopts final rule banning non-compete agreements between workers and employers, with only limited exceptions. The rule, set to go into effect 120 days from April 23, 2024, is already facing legal challenges that may delay the enforcement of the Final Rule.
  • The U.S. Supreme Court has issued a unanimous decision on April 17, 2024, in Muldrow v. City of St. Louis, Missouri. The Court held that employees alleging illegal discrimination under Title VII only need to show that the discriminatory action caused “some harm” with respect to an identifiable term or condition of employment. Prior to this ruling, employees were required to show “significant” harm to establish a Title VII claim.
  • The S. Equal Employment Opportunity Commission (EEOC) issued its Final Rule interpreting and implementing the Pregnant Workers Fairness Act (PWFA). The final rule clarifies several key aspects of the PWFA, including the definition of “reasonable accommodation,” “undue hardship,” and “known limitation,” and provides numerous examples of potential accommodations.

For the full stories, keep reading below.

NEW LAWS ENACTED

Several States Enact Laws Expanding the Characteristics Covered by Each State’s Anti-Discrimination Law

The landscape of employment anti-discrimination laws in the United States continues to evolve, with several states taking steps to expand the list of protected characteristics under their respective statutes. Recent legislative changes in Arkansas, Maryland, Vermont, and Virginia continue the trend of lawmakers broadening workplace protections to cover a more diverse range of personal and cultural characteristics. These additions also underscore the fact that while all fifty states have anti-discrimination laws on the books, the specific protected characteristics and how they are defined can vary from state to state.

  • Arkansas, through Act 514 of 2023, has added protections against discrimination based on natural, protective, or cultural hairstyles. Effective August 1, 2023, this legislation updated the Arkansas Civil Rights Act of 1993 to prevent employers with nine or more employees from discriminating against individuals who choose to wear their hair in styles such as afros, locs, twists, and braids. Along with Vermont, below, this move aligns Arkansas with a growing number of states that have adopted CROWN Acts, affirming protections against hair-based discrimination and acknowledging the cultural and racial significance of various hairstyles.
  • Similarly, Vermont Governor Phil Scott signed into law its own version of the CROWN Act on April 24, 2024. This legislation, effective July 1, 2024, expands Vermont’s Fair Employment Practices Act to explicitly prohibit discrimination based on hair type, texture, and protective hairstyles.
  • Virginia’s legislative changes, effective July 1, 2024, also broaden the scope of its Human Rights Act. B. 18/S.B. 7 added “ethnic origin” to the list of protected classes in the state’s anti-discrimination law. Following this update, it is unlawful for employers to discriminate against individuals based on race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy and related medical conditions, age, military status, disability, national origin, and now, ethnic origin.
  • Maryland has adopted amendments to its Fair Employment Practices Act (through SB0413/HB0598) and Equal Pay for Equal Work Act (through HB0602 and HB1397). These updates, which take effect on October 1, 2024, include protections against discrimination based on military status, and expand the scope of equal pay protections to include sexual orientation and religious beliefs. “Military status” includes a member of the uniformed services, a member of the military reserves, or a dependent of such a member. These legislative changes ensure that employers cannot discriminate in terms of compensation or employment opportunities based on these newly recognized characteristics.

Connecticut and New York Expand Paid Sick Leave Laws

In recent legislative developments, Connecticut and New York have both enacted expansions to their respective paid sick leave laws. These actions reflect a broader trend of governments enhancing worker protections and benefits and seeking to provide greater support for employee health and well-being.

Connecticut’s Expanded Paid Sick Leave Law

On May 21, 2024, Connecticut Governor Ned Lamont signed new legislation substantially expanding the state’s existing paid sick leave requirements. The law, which will be phased in over three years, mandates that nearly all private-sector employers provide paid sick leave to their employees by January 1, 2027.

Key Changes Under Connecticut’s New Law:

  1. Expanded Employer Coverage: The existing law applies to employers with 50 or more employees. The new legislation will gradually lower this threshold:
    • January 1, 2025: Employers with 25 or more employees.
    • January 1, 2026: Employers with 11 or more employees.
    • January 1, 2027: All private-sector employers, regardless of size.
  2. Broadened Employee Eligibility: The definition of eligible employees now includes all private-sector workers, including per diem and temporary workers, except for seasonal and certain unionized construction workers. This expands coverage beyond the current “service worker” classification.
  3. Expanded Qualifying Reasons for Leave: The law retains existing reasons for leave, such as personal or family illness and care needs, and adds new ones:
    • Public health emergency-related closures.
    • Situations where an employee or their family member poses a health risk due to communicable diseases.
  4. Extended Definition of Family Member: Employees can now use sick leave to care for a broader range of family members, including adult children, parents, grandparents, siblings, and individuals related by blood or affinity akin to family.
  5. Accelerated Leave Accrual Rate: The new legislation increases the accrual rate from one hour of sick leave for every 40 hours worked to one hour for every 30 hours worked, to allow employees to accumulate leave more quickly.
  6. Limitations on Required Documentation: Unlike the current law, which allows employers to request documentation for leave taken over three consecutive days, the new law prohibits requiring any documentation for paid sick leave.

New York’s Paid Prenatal Personal Leave

On April 20, 2024, New York Governor Kathy Hochul signed the fiscal year 2025 budget, which includes a groundbreaking amendment to the state’s Paid Sick Leave Law. This new provision mandates paid prenatal personal leave, making New York the first state in the U.S. to provide paid leave specifically for prenatal healthcare services.

Key Features of New York’s Prenatal Personal Leave:

  1. Mandatory Paid Prenatal Leave: Starting January 1, 2025, employers must provide 20 hours of paid leave per year for pregnant employees to attend healthcare services related to their pregnancy. This leave is separate from the state’s existing sick and safe leave entitlements.
  2. Hourly Increments and Compensation: Employees can take prenatal leave in hourly increments, and they must be compensated at their regular pay rate or the applicable minimum wage, whichever is higher.
  3. No Accrual Requirement: There is no waiting period or accrual requirement for prenatal leave, making it immediately available to eligible employees.
  4. Prohibition on Retaliation: Employers are prohibited from retaliating against employees who take prenatal leave or from requesting confidential health information to grant such leave.

COURT & AGENCY NEWS

EEOC Publishes Final Guidance on Workplace Harassment

On April 29, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) released its final, much-anticipated “Enforcement Guidance on Harassment in the Workplace.” As discussed in the November 2023 Brief newsletter when the proposed guidance was initially published, this comprehensive update–the first since 1999– consolidates and replaces several earlier guidance documents to provide a unified resource communicating the Commission’s official position on various legal issues related to harassment under federal employment discrimination laws. This move marks a significant effort to align EEOC enforcement guidance with recent legal developments and issues in the modern workplace, including the virtual work environment.

Scope of Protection and Legal Standards

The new guidance covers harassment based on a wide range of characteristics protected under federal law, including race, color, religion, sex (encompassing pregnancy, childbirth, sexual orientation, and gender identity), national origin, disability, age (40 or older), and genetic information. The EEOC’s analysis emphasizes that harassment can originate from various sources in the workplace, including coworkers, supervisors, and even non-employees, like customers, clients, and others.

Key Updates and New Provisions

1. Incorporation of Bostock v. Clayton County: Reflecting the U.S. Supreme Court’s 2020 decision, the guidance notes that sex-based discrimination under Title VII protects against harassment based on sexual orientation and gender identity. The guidance goes on to provide many examples of harassing conduct on these bases, such as outing someone (disclosing an individual’s sexual orientation or gender identity without permission), “repeatedly and intentionally using a name or pronoun inconsistent with the individual’s known gender identity (misgendering); or the denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity.”

2. Pregnancy and Related Conditions: The guidance describes protections that cover harassment related to pregnancy, childbirth, and associated medical conditions, including lactation. This aligns with recently enacted laws, such as the Pregnant Workers Fairness Act and the PUMP Act, reinforcing that employers must provide workplace accommodations and protections for pregnant and nursing employees.

3. Online and Virtual Harassment: Addressing the modern work landscape, the EEOC includes provisions on virtual harassment, recognizing the unique challenges posed by remote work environments. Examples provided include inappropriate comments during video calls, offensive content visible in video backgrounds, and harassment via online platforms and social media.

4. Retaliatory Harassment: The EEOC introduces the concept of retaliatory harassment, explaining that retaliatory actions that take the form of harassment can be unlawful even if they do not meet the standard harassment-related threshold of creating a hostile work environment.

5. Systemic and Intersectional Harassment: The guidance explores complex harassment scenarios, including those involving multiple protected characteristics (intersectional harassment) and harassment within the same protected group (intraclass harassment). These provisions underscore the multifaceted nature of discriminatory behaviors in diverse work settings.

Employer Liability and Preventive Measures

The guidance outlines the conditions under which employers can be held liable for harassment. It specifies different standards based on the harasser’s relationship to the employer and the nature of the harassment. For instance, employers are automatically liable for harassment by their proxies or alter egos (e.g., “sole proprietors and other owners; partners; corporate officers; and high-level managers whose authority or influence within the organization is such that their actions could be said to “speak for” the employer”), while different criteria apply to harassment by supervisors and non-supervisory employees.

The EEOC emphasizes the importance of preventative measures and effective response strategies. It recommends that employers adopt comprehensive anti-harassment policies, provide regular training, and establish clear reporting and complaint mechanisms. The guidance also suggests that employers proactively address potential harassment in all its forms, including those arising from non-traditional work arrangements and interactions with third parties.

Conclusion

The EEOC’s updated guidance on workplace harassment represents a pivotal step in addressing contemporary issues in employment law. By integrating recent legal precedents and addressing the realities of modern work environments, the guidance aims to provide a robust framework for preventing and responding to harassment in all its forms. Many employers will review and align their policies with these updates to ensure compliance and foster inclusive, respectful workplaces.

Department of Labor Issues Final Overtime Rule Update Increasing Salary Thresholds for Certain Exemptions

The U.S. Department of Labor (DOL) has issued a significant update to the overtime regulations under the Fair Labor Standards Act (FLSA), which will come into effect in two phases starting on July 1, 2024, and continuing on January 1, 2025. This new rule aims to expand overtime protections for millions of lower-paid salaried employees by raising the salary thresholds required for employees to be “exempt” as (1) bona fide executive, administrative, or professional employees (“EAP employees”) or (2) “highly compensated employees” (“HCE employees”). The proposed version of this rule was previously covered in the October 2023 edition of The Brief newsletter.

Key Changes and Thresholds

Effective July 1, 2024, the salary threshold for EAP employees will increase from the current $35,568 annually ($684 per week) to $43,888 annually ($844 per week). Subsequently, on January 1, 2025, this threshold will further increase to $58,656 annually ($1,128 per week). These changes aim to ensure that more salaried workers who exceed 40 hours of work per week are eligible for overtime pay or better compensation.

Additionally, the rule revises the threshold for highly compensated employees (HCE). Effective July 1, 2024, the HCE salary requirement will increase from $107,432 to $132,964 annually. This threshold will further rise to $151,164 annually on January 1, 2025. These adjustments align with the 85th percentile of salaried workers nationwide, ensuring that the salary levels remain relevant and reflective of current economic conditions.

Automatic Future Adjustments to Thresholds

One of the notable features of the new rule is the provision for regular updates to the salary thresholds every three years, starting July 1, 2027. These updates will be based on the latest wage data to ensure that the thresholds continue to reflect the economic realities of the labor market.

Next Steps for Employers and Compliance

The DOL estimates that over 3 million currently exempt employees will be affected by these changes, prompting employers to reassess their salary structures and classification of employees. This may involve evaluating current employee classifications, determining which employees may need to be reclassified as non-exempt, or adjusting salaries to meet the new thresholds.

Additionally, employers should stay informed about any developments regarding potential legal challenges to the rule. Keeping abreast of state-specific salary threshold requirements is also important, as some states may have more stringent rules than the federal standard.

Navigating the Rise of Artificial Intelligence in the Workplace: New Guidelines and Regulations

As artificial intelligence (AI) tools and automated management technologies become increasingly prevalent in the workplace, both federal and state authorities are introducing new guidelines and regulations to address potential compliance issues and protect against discriminatory practices. The U.S. Department of Labor (DOL) and the state of Colorado have recently issued significant directives aimed at managing the complexities and risks associated with the use of AI in employment settings.

U.S. Department of Labor Guidance on AI in the Workplace

On April 29, 2024, the U.S. Department of Labor’s Wage and Hour Division released Field Assistance Bulletin No. 2024-1, providing critical guidance on the application of federal labor standards to workplaces utilizing AI and automated systems. This bulletin underscores the DOL’s commitment to ensuring that AI technologies do not undermine workers’ rights under the Fair Labor Standards Act (FLSA) and other labor laws.

Key Points from the DOL Guidance:

  1. Accurate Timekeeping and Wage Calculation: AI systems used for tracking work hours must ensure all hours worked are accurately recorded and compensated, regardless of productivity or performance metrics. Systems that incorrectly categorize work hours as non-compensable based on employee activity data may result in violations of wage laws.
  2. Break and Waiting Time Compliance: Employers must ensure that short breaks are compensated and that employees are properly relieved of duty during longer breaks to qualify as unpaid. AI systems that automatically deduct break times without human oversight risk violating these regulations.
  3. Multiple Location Work and Waiting Time: AI technologies must account for all work performed, even outside primary locations or during waiting periods, ensuring that employees are compensated for all work-related activities.
  4. FMLA Leave Management: AI systems managing leave requests must comply with the Family and Medical Leave Act (FMLA) requirements, ensuring fair and accurate leave tracking and preventing any discriminatory practices in leave approvals or denials.
  5. Anti-Retaliation Protections: The use of AI to monitor or manage employee activities must not result in retaliation against workers for engaging in legally protected activities, such as filing complaints or taking legally mandated breaks.

Colorado’s Consumer Protections for Artificial Intelligence Law

On May 17, 2024, Colorado Governor Jared Polis signed SB24-205, known as the “Consumer Protections for Artificial Intelligence” law, making Colorado the first state to broadly regulate the use of AI systems. This landmark legislation, effective February 1, 2026, sets comprehensive standards for the development and deployment of “high-risk artificial intelligence systems.”

Highlights of the Colorado AI Act:

  1. Scope and Definition of High-Risk AI Systems: The law applies to AI systems involved in significant decision-making processes affecting education, employment, financial services, healthcare, housing, insurance, and legal services. High-risk systems are defined by their potential to make or influence consequential decisions impacting consumers’ access to these services.
  2. Developer and Deployer Obligations: Both developers and deployers of high-risk AI systems must exercise reasonable care to prevent algorithmic discrimination. This includes conducting impact assessments, maintaining transparency through public disclosures, and providing detailed documentation on the data, usage, and limitations of the AI systems.
  3. Consumer Rights and Transparency: The law mandates that consumers be notified when AI systems are involved in decision-making processes. In cases of adverse decisions, consumers must be given reasons for the decision, opportunities to correct errors, and the right to appeal through human review where feasible.
  4. Regulatory and Enforcement Framework: The Colorado Attorney General is granted broad rulemaking and enforcement authority, with potential penalties for violations falling under the state’s Unfair Trade Practices Act. The law also anticipates further detailed regulations to be developed.

Preparing for Compliance

As a best practice, employers (and AI developers) may consider preparing to align their practices with these new regulations. This includes:

  • Conducting Regular Audits: To ensure AI systems comply with labor standards, accurate timekeeping, wage calculations, and fair leave management.
  • Implementing Human Oversight: Regular, consistent oversight of AI-driven processes to correct any potential discrepancies or biases.
  • Establishing Clear Policies and Communication Channels: Providing employees with clear guidance and avenues for reporting issues related to AI systems.
  • Assessing and Documenting AI Systems: For companies deploying AI in Colorado, thorough documentation and risk assessments of AI systems to demonstrate compliance with the Colorado AI Act.

As AI continues to evolve and integrate into various aspects of business operations, staying informed and proactive in addressing regulatory requirements will be crucial.

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