HR Compliance Changes Take Effect July 1; Trends Include Minimum Wage, Military Leave and Payroll Updates

Author: Rena Pirsos, XpertHR Legal Editor

June 21, 2016

HR departments should get ready now to comply with a wide variety of employment law requirements that are changing on July 1. Depending on an employer's presence in various jurisdictions, a number of workplace practices may be affected by legislative changes, ranging from employment contracts to payroll.

For example, Idaho and Mississippi enacted amendments to laws governing noncompete agreements. Rhode Island amended its discrimination statute to protect employees responding to a subpoena, while Mississippi passed a law expanding protections for those expressing sincerely held religious beliefs.

Other notable legislative changes include:

  • California amending its temporary disability insurance (TDI) benefit and waiting period provisions;
  • Indiana passing a law protecting franchisors from liability for certain acts of franchisees;
  • Portland, Oregon passing a "ban the box" law;
  • Tennessee amending its data breach notification law, as well as mandating E-Verify for large employers;
  • Vermont prohibiting the use of tobacco substitutes;
  • Wyoming amending its workers' compensation law; and
  • Wisconsin passing a distracted driving ban and protecting employees taking bone marrow and organ donation leave.

Although the new requirements cover a broad range of issues, there are three legal areas in particular where the changes are most heavily concentrated: minimum wage rates, military leave protections and payroll.

State and Local Minimum Wage Changes

Many US cities and counties have adopted their own local minimum wage rates (which may be different than the state rate), resulting in a patchwork of requirements for employers that operate in more than one location. Certain jurisdictions, such as Emeryville, California and Oregon, will adjust applicable minimum rates for inflation.

Employers with employees working in the following states, cities and counties will have to reprogram their payroll systems accordingly, before July 1, to account for the different rates.

  • Los Angeles (L.A.) and L.A. County, California - $10.50 per hour for employers with at least 26 employees. Additional annual increases are scheduled through 2020, when the rate in these locations will top out at $15 per hour.
  • L.A., California - $15.37 per hour for small hotels with 150 to 299 guest rooms or suites of rooms.
  • El Cerrito, California - $11.60 per hour.
  • San Francisco, California - $13 per hour.
  • Emeryville, California - $13 per hour for small businesses for which 55 or fewer employees (including full-time, part-time and temporary employees) work during a given week. The minimum wage for large businesses for which 56 or more employees (including full-time, part-time and temporary employees) work during a given week will be adjusted by the rate of inflation.
  • Chicago, Illinois - $10.50 per hour; the greater of the minimum cash wage for tipped employees under the Fair Labor Standards Act (currently $7.25 per hour), or the state minimum wage of $10.50 per hour plus an additional $1.00 per hour.
  • District of Columbia - $11.50 per hour.
  • Lexington-Fayette County, Kentucky - $8.20 per hour (this the first time the County has its own minimum wage rate and it is higher than the current state rate of $7.25 per hour).
  • Louisville/Jefferson County, Kentucky - $8.25 per hour.
  • Maryland - $8.75 per hour.
  • Montgomery County, Maryland - $10.75 per hour; $6.38 per hour for tipped employees.
  • Oregon and the Portland area - $9.75 per hour.
  • Certain rural counties, Oregon - $9.50 per hour. These rates will increase annually on July 1 until 2023, at which point they will be adjusted annually for inflation (but they may not go lower than $1 below the state minimum wage).

Military Leave Protection Laws

The following five states have expanded similar reinstatement rights to certain National Guard members returning from [Article: 20973 "military leave"].

  • Georgia - Reinstatement rights for Georgia National Guard members will apply as of July 1 to National Guard members of any state. Current law requires a Georgia employer to provide permanent employees with an unpaid leave of absence to perform military service and to reinstate them to the same job or position of like seniority, status and pay upon their return. Georgia National Guard members on active state service who are terminated or suspended due to that service must apply to be reinstated, or to have the suspension period ended within 10 days following the termination, suspension or end of active state service.
  • Idaho - Idaho law contains provisions related to military leave that require all Idaho employers to grant a leave of absence to employees who are enlisted in the Idaho or other National Guard and who are called to active duty for 30 or more consecutive days (other than for training). As of July 1, the 30 or more consecutive days requirement that triggers Uniformed Services Employment and Reemployment Rights Act (USERRA) protection for National Guard members is eliminated.
  • Indiana - Under a state law amendment, federal USERRA rights will be extended to National Guard members of other states who are ordered to active duty. Currently, the law applies only to members of the Indiana National Guard ordered to active duty.
  • Virginia - Virginia's military leave rights will apply to residents of the Commonwealth who are members of the National Guard of another state. The law currently applies only to members of the Virginia National Guard and the Virginia Defense Force.
  • Wyoming - The Military Service Relief Act will apply to employees who are members of the National Guard of any state. The law currently applies only to members of the Wyoming National Guard. In addition, private employers in Wyoming will be permitted to grant a preference in hiring and promotion decisions to a veteran, a spouse of a veteran with a disability, or a surviving spouse of a deceased veteran, without committing a discriminatory or unfair employment practice under local or state equal employment opportunity law.

Payroll Laws

In addition to reprogramming payroll systems to account for the many new minimum wage rates and the new FLSA overtime pay regulations, payroll practitioners should be prepared for the following federal and state changes taking effect.

  • Form W-2 - Final, temporary and proposed IRS regulations will remove the automatic 30-day extension of time to file information returns on the W-2, Wage and Tax Statement, series of forms (except Form W-2G, Certain Gambling Winnings). This applies to the tax year 2016 information returns filed in 2017. A single 30-day non-automatic filing extension will be provided instead.
  • South Dakota - The aggregate disposable earnings subject to garnishment for any workweek are limited to the lesser of:
    • 20% of disposable earnings for that week; or
    • The amount by which disposable earnings for that week exceed 40 times the federal minimum wage, or the applicable state minimum wage if that amount is greater, or, in the case of earnings for any pay period other than a week, any equivalent multiple thereof under South Dakota regulations in effect at the time the earnings are payable, less $25 a week for each dependent family member residing with the employee who is subject to the garnishment.
  • Tennessee - Employers with 10 to 249 employees that fail to file quarterly state unemployment insurance wage reports electronically may be assessed a penalty of $50 per month, up to a maximum of $500. The electronic filing threshold was reduced from 250 or more employees to 10 or more employees as of January 1, 2016.