Staying on top of new regulations and changes in employment laws is no easy task. On the federal level, the Department of Labor (DOL) administers and enforces more than 180 laws. Add to that, many state and local governments have their own laws. And then there are laws governing health plans and benefits.
According to a recent survey, only one in four businesses are confident about their knowledge of current employment laws and regulations at the federal (23%), state (26%) and city/county (29%) levels. While not all laws apply to all employers, HR managers should be familiar with the laws that do. To help, here are a few that may affect your business in 2020.
Changes that May Impact Your Business
More States Increase Minimum Wage. Currently, the federal minimum wage for covered non-exempt employees is $7.25 per hour. Many states, cities and counties also have minimum wage laws. As of Jan. 1, the minimum wage increased in 21 states with additional states to follow. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two wages.
H-2B Final Rule. The DOL’s H-2B program allows employers to hire non-immigrants on a temporary, seasonal basis for certain non-agricultural jobs (the H-2A program is similar, but for agricultural jobs). Effective December 16, 2019, a final rule removed the old requirement that employers post H-2B job openings in local print newspapers. Instead, the DOL now posts these opportunities on its website.
FSLA Overtime Rules. Employees covered by the Fair Labor and Standards Act (FSLA) must receive overtime pay of at least one and one-half times the regular rate of pay over 40 hours in a workweek. Effective Jan. 1, 2020, the minimum salary for exempt employees increased to $35,568 and $107, 432 for highly-compensated employees. Employees who earn less than the new thresholds are eligible for overtime pay. With some exceptions, the regular rate includes all compensation for employment, including up to 10 percent of commissions and non-discretionary bonuses. Employers will need to audit their employees’ regular rate of pay to determine if pay adjustments are necessary or if certain employees need to be reclassified as non-exempt.
New SECURE Act changes. The Setting Every Community up for Retirement Enhancement Act, or SECURE Act, helps small businesses by providing incentives for setting up an employer-sponsored retirement plan. This new legislation contains a number of changes and requirements to applicable retirement plans rules, including the design of the plans, administration, and compliance.
Work Opportunity Tax Credit extension. Available through the end of 2020,the Work Opportunity Tax Credit provides an incentive to employers who hire employees from disadvantaged groups, such as ex-felons, public assistance recipients, and veterans.
Paid Family & Medical Leave Act Tax Credit. Eligible employers earn a tax credit for providing paid family and medical leave to their employees. The tax credit is now available through 2020.
The Cadillac Tax has been repealed. A tax on high-cost health coverage, known as the Cadillac Tax, was eliminated at the end of 2019. The Cadillac tax would have imposed a 40 percent tax hike on the cost of employer-sponsored health benefits that exceed mandated thresholds.
OSHA’s Final Rule. OSHA published a Final Rule amending its record-keeping regulation. Applicable employers are only required to electronically submit information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). The Final Rule does not change the requirement to keep and maintain OSHA Forms 300, 300A, and 301 for five years. The deadline for electronically reporting OSHA Form 300A data for calendar year 2019 is March 2. Employers with 10 or fewer employees and employers in certain industries are exempt from OSHA’s injury and illness record-keeping and posting requirements.
The Shield Act on data security. Effective March 21, 2020 employers must adopt more stringent data security safeguards. More expansive data breach notification requirements went into effect in 2019.
Proposed Federal Legislation. Be on the watch for updates about the following legislation that’s in the works on the federal level. As always, it’s important to also check current state laws that are applicable to your business.
Protecting the Right to Organize (PRO) Act. Recently passed by the U.S. House of Representatives, the Protecting the Right to Organize Act, or PRO Act, includes provisions that could change current labor laws. Provisions include:
- Secret-ballot union elections could be more easily bypassed by signing union authorization cards.
- Classifying workers as independent contractors would be more difficult.
- An expanded definition of "joint employer" could potentially impact small businesses, particularly franchises.
Medicare Part D premiums to decrease. Each year, applicable employers must provide a notice of creditable or non-creditable coverage to all Medicare-eligible employees who are covered under a prescription drug plan. The Centers for Medicare and Medicaid expect premiums for Medicare Part D prescription drug plans to decrease in 2020.
Does your HR team have the experience in employment law to keep your business in compliance? Not all do and not all employers have access to counsel from a labor attorney. At minimum, it’s important for your HR team to determine which federal and state employment laws apply to your business and understand the requirements of each law.
PLEASE NOTE: This information is for general reference purposes only. Because laws and regulations are constantly changing, please check with the appropriate organizations or government agencies for the latest information and consult your employment attorney and/or benefits advisor regarding your responsibilities. In addition, your company may be exempt from certain requirements and/or be subject to different requirements under the laws of your state.
Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for more than 20 years. Propel partners with small to mid-sized businesses to manage payroll, employee benefits, compliance and risks, and other HR functions in a way that maximizes efficiency and reduces costs.