US employment law in 2021: Changes to be aware of

By Mark Baggs, Head of Global

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2021 has seen several US employment law changes. From helping to deal with the impact of the pandemic, to changes relating to leave, maternity care, and contractor status. In the US, many states have altered employee policy to help improve the lives of the workforce and businesses. Some of these steps are temporary for the pandemic, and others look here to stay.

 

We’ve highlighted some key changes that have been made in four states of America as of the beginning of 2021.

Massachusetts

A key change for employers in Massachusetts in 2021 is leave benefits under the PFML (paid family and medical leave) benefit.

From the beginning of January, individuals can utilise paid family and medical leave to spend the first 12 months after the child's birth or after adoption or foster placement of a child, with the child. They can also do so to care for their own health reasons or needs relating to a family member's active duty or call to duty in the Armed Forces. Paid leave to care for a family member with a serious health condition will become available from 1st of July.

Further to this, minimum wage changes have occurred in the state.  Massachusetts' minimum wage has risen from $12.75 per hour to $13.50 per hour and tipped workers' minimum wage increases from $4.95 to $5.55 an hour. The changes are part of a multi-year phased transition to a $15 minimum wage and elimination of premium pay that Beacon Hill leaders approved in 2018 as part of the "grand bargain" with business and labour groups.

Colorado

Law SB 19-085 (Equal Pay for Equal Work Act) impacts pay equality and discrimination. It prohibits wage discrimination based on sex and gender.  The law also prohibits employers from asking about job candidates’ wage history or relying on wage history to determine a wage rate. Therefore, employers cannot discriminate or retaliate against a prospective candidate, for failing to disclose wage history.

Law SB 20-205 impacts paid leave. This law allows employees to accrue an hour of paid sick leave for every 30 hours worked. This can build up to 48 hours per annum. This will apply to employers with 16 or more employees who started at the beginning of 2021. By January 1st, 2022, this is expected to apply to all employers.

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California

Under California’s AB 685, from January 1st 2021 the law now requires employers to notify employees within one business day of potential exposure to COVID-19. Not doing so will result in a hefty fine.  Another law, SB 1159, which has been effective since September 17, 2020, creates a rebuttable presumption, for purposes of workers’ compensation, that a COVID-19 related illness of an employee arose in the course of employment and is therefore compensable.

Under the law AB 979, there is now a requirement for the number of directors from an “underrepresented community” based on the size of the board, to be increased over time. The aim of this law is to increase diversity on boards of businesses. A “director from an underrepresented community” can be described as an individual who “self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”

Virginia

From 1st of January, the HB 1407 law assumes a worker is an employee unless deemed a contractor status under federal IRS guidelines. The aim of this is to prohibit the misclassification of workers by providing civil penalties. The Department of Taxation shall determine whether an individual is an independent contractor by applying internal Revenue Service Guidelines.

It also assumes any one or more alleged violations within 72 hours constitute a single violation, but beyond that, it imposes penalties up to $5,000 per misclassified individual.

Keeping up to date with legislative changes

It’s vital to keep up to date with any changes that can impact employment law in your countries of operation. Not doing so can incur both financial and reputational losses.

If you need assistance navigating the legal environment, or perhaps you have some questions regarding expanding your business into another country, get in touch with one of our global expansion experts today.

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