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Employers are Preparing Now to Tackle 2019's Newest Labor and Employment Laws
As 2018 draws to a close, employers are looking to the next wave of labor and employment laws and regulations that will take effect in 2019 and beyond. On January 1, and throughout the coming year, employers across the nation must address a host of new or amended federal, state, and/or local obligations. This article summarizes the laws and regulations taking effect in 2019 that will impact most employers, and highlights some anticipated activity in the coming months.
Federal Activity
The majority of labor and employment bills stalled in the 115th Congress. The most significant federal legislative development in 2018 that impacted employment law was Congress’s omnibus budget bill, the Consolidated Appropriations Act (“the Act”). The Act amended the Fair Labor Standards Act by addressing rules affecting tipped employees and tip ownership. Specifically, the Act expressly prohibits an employer from keeping tips received by its employees for any purposes (this includes allowing managers or supervisors to keep any portion of employees’ tips), regardless of whether the employer takes a tip credit.1
The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, impacts certain deductions and reporting provisions for 2018 in 2019. For example, the law eliminated, at least through 2025, the exclusion for employer-paid relocation expenses, the deduction for employer-paid transportation fringe benefits, and the business deduction for entertainment expenses.2
This tax law also included a provision that eliminates a business expense deduction related to nondisclosure agreements (NDAs) in connection with the settlement of sexual harassment claims. The law amends section 162 of the tax code, which generally allows businesses to deduct certain business expenses, to provide that no business expense deduction will be allowed for: (1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or (2) attorney’s fees related to such a settlement or payment. This exclusion applies to amounts paid or incurred after December 22, 2017, the date the tax bill was enacted. As a practical matter, this new restriction means employers must decide on a case-by-case basis whether any amount paid to settle a sexual harassment claim is significant enough to be worth the tax deduction at the expense of an NDA.
Immigration policy and enforcement remains a Trump administration priority. Although no immigration-related bill advanced in 2018, employers will likely continue to see increased U.S. Immigration and Customs Enforcement activity and U.S. Citizenship and Immigration Services (USCIS) policy initiatives in response to White House directives on immigration.3 Further changes are anticipated from USCIS in 2019.4
For the most part, federal employment law activity has been confined to the regulatory arena. For example, the National Labor Relations Board (NLRB) issued a proposed rule in September that would reverse the NLRB’s 2015 Browning-Ferris Industries decision and clarify the standard for joint employment.5 The comment period for the proposed rule will close on December 13, 2018; and a final rule is expected sometime in 2019. The DOL's Wage and Hour Division also may propose its own joint employer rule, a re-vamped “white collar” overtime proposed rule, and a rule clarifying the “regular rate” of pay calculation for purposes of overtime compensation.6 Some final rules will take effect immediately, while others might afford employers a compliance grace period.
State and Local Activity
While federal legislative developments may have been slow in 2018, state and local lawmakers picked up the slack. As the chart below demonstrates, states and municipalities have adopted new laws and ordinances that will take effect in 2019 on a variety of topics, including protected time off, sexual harassment training, and salary history inquiries.
Many new state and local laws enacted in 2018 have already taken effect. The chart below focuses only on those laws with effective dates in 2019 or later. Readers interested in keeping abreast of legislative activity at the state and local levels should follow State of the States, our monthly report featuring notable bills and trends percolating in the statehouses and city halls nationwide.7
Laws Taking Effect in 2019
The chart below briefly recaps laws and regulations that will become effective in the few remaining weeks of 2018 and in 2019. Although local and industry-specific laws may be listed, these samples are included primarily to highlight compliance challenges employers face. Further, this chart does not include all state and local minimum wage updates. A complete discussion of minimum wage rate changes for 2019 can be found in a separate Littler Insight to be published later this month. Because the below chart is only a summary and does not include all possibly applicable federal, state, and local laws, employers are encouraged to discuss with knowledgeable counsel the local, state, and/or federal laws that will apply to the employer’s workplace in 2019.
| Federal | |||
| Law | Main Topic | Summary | Effective Date |
| Executive Order 13658 | Contractor Minimum Wage | Increases to $10.60 per hour the wage rate that generally must be paid to workers performing work on or in connection with covered contracts; increases to 7.40 per hour the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts. | 1/1/2019 |
| EBSA Rule on Moral Exceptions | Benefits: Contraceptive Coverage | These rules finalize expanded exemptions to protect moral beliefs for certain entities and individuals whose health plans are subject to a mandate of contraceptive coverage through guidance issued pursuant to the Patient Protection and Affordable Care Act. | 1/14/2019 |
| EBSA Rule on Religious Exceptions | Benefits: Contraceptive Coverage | These rules expand exemptions to protect religious beliefs for certain entities and individuals whose health plans are subject to a mandate of contraceptive coverage through guidance issued pursuant to the Patient Protection and Affordable Care Act. | 1/14/2019 |
| OSHA Rule on Crane Operators | Construction: Training and Evaluation of Crane Operators | Amends standards for construction employers concerning the training, certification or licensing, and evaluation of crane and derrick operators. Evaluation and documentation requirements take effect on February 7, 2019. | 12/09/2018 |
| Alaska | |||
| Law | Main Topic | Summary | Effective Date |
| HB 79 | Workers’ Compensation | Amends Alaska Workers’ Compensation Act to define and exclude independent contractors from the benefits of the act, and prevents discrimination against employees who in good faith filed a workers’ compensation claim, but does not prohibit requiring applicants fill out a prior health or disability history form. | 11/22/2018 |
| California8 | |||
| Law | Main Topic | Summary | Effective Date |
| AB 1654 | PAGA Liability: Construction Employers | Excludes construction employees from coverage under the state Private Attorneys General Act, if covered by a collective bargaining agreement that includes certain provisions, such as an express waiver. Remains in effect until January 1, 2028. | 1/01/2019 |
| AB 1976 | Lactation Accommodation | Amends lactation accommodation provisions to require employers to provide a location other than a bathroom to express milk. | 1/01/2019 |
| AB 2034 | Human Trafficking Notice & Training | Mandates updated notice to be posted by January 1, 2019 by numerous types of employers (public transportation, emergency rooms, hotels, rest areas, etc.). Requires training for certain mass transit employees by January 1, 2021. | 1/01/2019 |
| AB 22829 | Salary History | Amends the statewide salary history ban, adding guidance about the questions an employer may ask during an interview and when employers must disclose pay scales for positions. | 1/01/2019 |
| AB 233410 | Workplace Safety | Allows Cal/OSHA to issue recordkeeping citations for errors to logs, for up to five years. Empowers Cal/OSHA to consider enforcing electronic recordkeeping requirements if the federal agency ceases doing so. | 1/01/2019 |
| AB 2338 | Sexual Harassment Training: Talent Agencies | Requires agencies to distribute anti-harassment materials, along with information about nutrition and eating disorders. | 1/01/2019 |
| AB 2455 | Home Care Aide Registry | Authorizes disclosure of home care aide contact information to labor unions, upon request, after July 1, 2019. | 1/01/2019 |
| AB 2587 | Family Temporary Disability Insurance | Repeals the seven-day waiting period for the initial receipt of insurance benefits under the California family temporary disability insurance and the provision allowing employers to apply vacation leave to the waiting period. | 1/01/2019 |
| AB 2610 | Commercial Driver Exception to Meal Period Laws | For certain commercial drivers, requires a meal period after six hours of work, instead of five hours, if the driver is paid at 1.5 times the minimum wage and receives overtime compensation. | 1/01/2019 |
| AB 277011 | Discrimination and Harassment: References | Allows a former employer to state it would not rehire a former employee based on the employer’s determination that the former employee engaged in sexual harassment. | 1/01/2019 |
| AB 2844 | Insurance Broker Commissions | Creates rebuttable presumption that commission is lawful if compliant with other provisions and paid per written agreement. | 1/01/2019 |
| AB 3109 | Waivers of Right of Petition or Free Speech | Provides that a contract or settlement agreement provision is void and unenforceable if it waives a party’s right to testify about criminal conduct or sexual harassment committed by the other party. | 1/01/2019 |
| AB 3247 | Arbitration Agreements | Mandates that if a party to an arbitration agreement refuses to arbitrate, the court must order arbitration when petitioned by another party, unless grounds exist for rescission of the arbitration agreement. | 1/01/2019 |
| SB 224 | Harassment Liability | Amends Civil Code to impose liability on a defendant who “holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party,” including elected officials, lobbyists, directors, and producers. | 1/01/2019 |
| SB 820 | Non-Disclosure Agreements | Prohibits confidentiality provisions in settlement agreements that would thwart disclosure of information related to claims of sexual assault, harassment, and discrimination. | 1/01/2019 |
| SB 826 | Board of Directors Membership | Mandates that publicly held corporations must have a set number of women on their board of directors, based on the number of individuals on the board. | 1/01/2019 |
| SB 1123 | Paid Family Military Leave | Amends the Family Temporary Disability Insurance Program to include time off for a servicemember to participate in a qualifying exigency related to a covered active duty. | 1/01/2021 |
| SB 1252 | Wage Record Receipt | Allows current and former employees to request a copy of their wage record that they can keep. | 1/01/2019 |
| SB 130012 | Discrimination and Harassment | Among other things, curtails an employer’s ability to utilize non-disparagement clauses and certain waivers for claims asserted under the state Fair Employment and Housing Act. | 1/01/2019 |
| SB 1343 | Sexual Harassment Training: General | Requires employers with five or more employees to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every two years thereafter. | 1/01/2019 |
| SB 1402 | Customer Liability in Labor Contracting: Port Drayage | Establishes joint and several liability for customers who use or engage port drayage motor carriers if those carriers have unpaid wages, taxes, or workers’ compensation claims. | 1/01/2019 |
| SB 1412 | Criminal History | Creates additional exemptions to the restriction on inquiring about an applicant’s prior arrest and detention record. | 1/01/2019 |
| SB 1428 | Employment of Minors | Work permits may not be denied based on grades, GPA, or school attendance for minors seeking to participate in government-administered programs during school breaks. | 1/01/2019 |
| SB 1500 | Discrimination Against Service Members | Prohibits employers from discharging or halting benefits of an employee for being a member of the military reserve or because of ordered military duty or training. | 1/01/2019 |
| Oakland, Measure Z | Hotel Worker Protections | Amends Oakland municipal code to raise minimum wage for covered hotel employees, require employers to provide panic buttons, and limit mandatory overtime, among other items. Minimum wage increase takes effect in 2019, with potential regulations and enforcement mechanisms likely by 2020. | 7/01/2019 |
| AB 37513 | Consumer Privacy | Allows a consumer to request a business disclose the personal information it collects, the categories of sources that collect the information, the business purposes for collecting or selling the information, and the categories of third parties with which the information is shared. | 1/01/2020 |
| SB 97014 | Human Trafficking Training: Hotels and Motels | Requires hotels and motels subject to the Fair Employment and Housing Act (FEHA) to provide at least 20 minutes of training regarding human trafficking awareness to each employee likely to interact or come into contact with victims of human trafficking. | 1/01/2020 |
| SB 1121 | Consumer Privacy | Amends the new California Consumer Privacy Act (AB 375, above) to allow consumers to recover damages from a business if the business does not use reasonable security procedures to protect confidential information, and a breach occurs. | 1/01/2020 |
| Colorado | |||
| Law | Main Topic | Summary | Effective Date |
| HB 1186 | Benefits: Contraceptive Coverage | Requires health benefit plans to cover a multiple-months’ supply of prescription contraceptives or contraceptive ring intended to last for a three-month period. | 1/01/2019 |
| Connecticut | |||
| Law | Main Topic | Summary | Effective Date |
| Conn. Gen. Stat. §§ 31-410 et seq.15 | Mandatory IRAs | Requires private-sector employers without their own workplace-based retirement plans to enroll employees in Individual Retirement Arrangements (IRAs) sponsored by the state. Per recent announcement, the law will be phased-in beginning in 2019. The requirement stems from legislation enacted in 2016. | 1/01/2019 |
| HB 5210 | Benefits: Essential Health Care | Requires insurance coverage of certain health benefits, and expands benefits for women and individuals age 21 and under to include coverage for preventive services and screenings, immunizations, and contraceptives. | 1/01/2019 |
| HB 538616 | Salary History Inquiries | Prohibits an employer from inquiring about an applicant’s salary history before an offer of employment, unless the applicant voluntarily discloses such information. | 1/01/2019 |
| Delaware | |||
| Law | Main Topic | Summary | Effective Date |
| HB 36017 | Sexual Harassment Protections and Training | Requires employers with 50 or more employees to provide sexual harassment training to new employees within one year of employment, to existing employees within one year of the effective date of this act, and every two years thereafter. | 1/01/2019 |
| HB 483 | Training and Youth Wages | Creates a minimum training wage and youth wage of no more than $0.50 less than the state minimum wage. Training wage applies during the first 90 days of employment of an employee who is age 18 or older. | 1/01/2019 |
| HB 409 | Mini-WARN | Requires employers with 50+ employees to provide 60 days’ notice to affected employees, the Delaware Department of Labor WARN Act Administrator, and the Delaware Workforce Development Board of mass layoffs, plant closings, or relocations that will cause employment loss. | 1/07/2019 |
| Hawaii | |||
| Law | Main Topic | Summary | Effective Date |
| SB 235118 | Salary History Restrictions and Wage Transparency | Prohibits employers from inquiring about an applicant’s salary history or relying on that information when determining what compensation to offer the applicant. | 1/01/2019 |
| Illinois | |||
| Law | Main Topic | Summary | Effective Date |
| SB 2999 | Expense Reimbursement | Requires employers to reimburse employees for all necessary expenditures or losses directly related to services performed by the employer. | 1/01/2019 |
| SB 3547 | Service Member Employee Reemployment Rights Act | Prohibits employers from imposing conditions for military leave. Service members must provide notice of pending service to employers to take military leave. | 6/01/2019 |
| Massachusetts | |||
| Law | Main Topic | Summary | Effective Date |
| SB 2632 | Unpaid Veterans Leave for Memorial Day and Veterans Day | Amends prior leave law to require private employers to grant leave, paid or unpaid, for Memorial Day or Veterans Day to an employee who is a veteran. | 11/08/2018 |
| HB 464019 | Minimum Wage, Sunday and Holiday Premium Pay, and State Paid Family Medical Leave | Increases the minimum wage from $11 to $15 over five years, culminating in 2023. Gradually eliminates premium pay for retail employees on Sundays and holidays. Requires employers to provide paid family and medical leave to covered individuals. | 1/01/2019 |
| Michigan | |||
| Law | Main Topic | Summary | Effective Date |
| Adopted Ballot Measures20 | Paid Sick and Safe Time, Minimum Wage Raise | The Earned Sick Time Act requires all private employers with one or more employees to provide paid sick and safe leave. The Improved Workforce Opportunity Wage Act raises the minimum wage in yearly steps until January 1, 2023, and each subsequent January 1, when the minimum wage is increased based on inflation. These laws may be subject to amendment during the ongoing legislative session, and the effective date is uncertain. | Approx. 4/01/2019 |
| Approved Ballot Measure, Proposal 121 | Marijuana | Permits adult recreational possession, use, and cultivation of marijuana. Commercial growing, marketing, and sales will follow after regulations are developed. | Approx. 12/06/2018 |
| Minnesota | |||
| Law | Main Topic | Summary | Effective Date |
| Duluth Ordinance No. 15071 | Paid Sick Leave | Requires employers in Duluth with 5 or more employees to provide employees with one hour of earned sick and safe time for every 50 hours worked. | 1/1/2020 |
| Missouri | |||
| Law | Main Topic | Summary | Effective Date |
| Approved Ballot Measure, Amendment 222 | Marijuana | Authorizes qualifying residents or their caregivers to obtain identification cards to purchase marijuana, to alleviate the effect of certain medical conditions. Under this state constitutional amendment, application materials must be made available in June 2019. | Approx. 6/04/2019 |
| New Hampshire | |||
| Law | Main Topic | Summary | Effective Date |
| HB 1372 | Subcutaneous Identification Devices | Prohibits requiring, coercing, or compelling another individual to implant a subcutaneous identification device, either internally or externally. | 1/01/2019 |
| New Mexico | |||
| Law | Main Topic | Summary | Effective Date |
| HB 276 | Statements of Withholding | Requires employers to submit annual statements of withholding electronically to the state tax department. | 1/01/2019 |
| New York | |||
| Law | Main Topic | Summary | Effective Date |
| New York City Int. 0632-201823 | Discrimination & Harassment | Requires all private NYC employers with 15 or more employees to conduct annual anti-sexual harassment training. | 4/01/2019 |
| Westchester County Local Law 1062324 | Paid Sick Leave | Requires covered employers to allow eligible employees to accrue one hour of earned paid sick time for every 30 hours worked up to 40 hours per year. | 4/10/2019 |
| Ohio | |||
| Law | Main Topic | Summary | Effective Date |
| SB 22025 | Cybersecurity | Provides legal safe harbor to businesses that implement a program for protecting personal information that meets industry standards. | 11/03/2018 |
| Texas | |||
| Law | Main Topic | Summary | Effective Date |
| San Antonio Ordinance26 | Paid Sick Leave | Requires employers to provide one hour of earned sick time leave for every 30 hours worked within the City of San Antonio. Enforceability may be affected by pending litigation concerning the Austin paid sick law. | 8/01/2019 |
| Utah | |||
| Law | Main Topic | Summary | Effective Date |
| Approved Ballot Measure, Proposition 227 | Marijuana | Authorizes qualifying residents or their caregivers to obtain identification cards to purchase marijuana, to alleviate the effect of certain medical conditions. Under Proposition 2, cards must be issued no later than March 1, 2020. The Utah legislature may soon pass a bill to amend this measure. | In flux |
| Washington | |||
| Law | Main Topic | Summary | Effective Date |
| SB 5975 | Paid Family Leave | Requires employers to provide 12 weeks of paid time off for the birth/adoption of a child, or for the serious medical condition of the employee or the employee’s family members. | 12/31/2019 |
| HB 2822 | Service Animal Misrepresentation | Amends Washington’s discrimination law to clearly define “service animal,” and creates a maximum penalty of $500 for misrepresenting an animal as a service animal. | 1/01/2019 |
| Seattle Ordinance, CB 11928628 | Domestic Worker Ordinance | Extends various protections (minimum wage, rest breaks) to domestic workers in Seattle. | 7/01/2019 |
