HR professionals are keeping a sharp eye on legislative changes taking effect in the new year, and new proposals under consideration as we enter a new decade.
The new decade brings with it new state and federal legislation affecting employee rights. Some laws may radically reshape what it means to be a full-time employee vs. working part-time or operating as a freelancer, and could ultimately impact the very foundation of today’s “gig economy”. Other proposed legislation could impact FMLA and how it is applied to part-time workers. The ever-changing landscape, especially where business operations cross multiple states and jurisdictions, will keep HR professionals on alert for everything from how HR policies might be affected to how employee files are managed, and more.
Employee Classification in California
A new law in California, Assembly Bill 5 (or AB5 for short), will force businesses to redefine how they classify independent contractors. The concern has been that companies have created an underclass by defining their workers as contractors to avoid offering health benefits, paid leave, and other types of compensation. This new law aims to protect workers by making it mandatory to classify laborers as employees if the work they do is a regular part of a company’s business. While this law is designed to safeguard gig workers from exploitation, in some cases it has had a blowback effect by forcing companies to let go of contractors. Some freelancers have expressed concern and frustration with the new law as well, claiming it makes finding work difficult and limits their ability to maintain a flexible work schedule.
Minimum Wage Increases
A record number of states and cities across the country will have minimum wage increases in 2020, directly affecting as many as 7 million workers. Those who support a higher minimum wage argue that the cost of living has increased drastically over the last decade and the current federal minimum wage of $7.25 an hour is not enough to live on. Many advocates believe that $15 an hour is a more acceptable standard. However, opponents argue that a higher minimum wage puts a strain on small businesses and employers who wouldn’t be able to support substantial wage increases, ultimately leading to more unemployment. Some states still default to the $7.25 federal minimum wage, while others set the rate much higher. Washington State, for example, has increased its minimum wage to $13.25 an hour in 2020, and in Seattle, the pay increases $16.39 per hour. While many economists believe that a slightly higher federal minimum wage would not have a drastic impact on businesses, most agree that there are limits to how high wages can be increased without negatively impacting employers and businesses.
Employee Access to Personnel Files
The movement to allow employees the right to access their personnel files continues to gain momentum, making HR file management a growing concern among HR professionals. More than 20 states in the U.S. now require employers to provide employees with access to at least some of their personnel files upon request. Many of these states also give the same right to former employees. Businesses operating in states that do not provide this right should be prepared. Given the current trend, it is likely that all businesses will be required to offer access to their employees in the coming years.
Nolo offers a handy reference on state laws concerning employee access to their personnel files: https://www.nolo.com/legal-encyclopedia/free-books/employee-rights-book/chapter5-2.html
Looking Ahead in HR: Changes in FMLA?
For lawmakers, employee protection is a trend that will likely endure into the new decade. For example, the Part-Time Worker Bill of Rights Act, backed by presidential candidate Sen. Elizabeth Warren, would (if passed) expand protections for part-time workers. The bill looks to modify the Family and Medical Leave Act (FMLA) by lowering the amount of time required to become eligible for leave. The bill would also make it mandatory that employees who work at least 500 hours for two consecutive years have the same access to retirement plans that are offered to full-time employees. In addition, the new bill would require companies with more than 500 employees to offer available hours to current, qualified part-time employees before they can hire new workers.
Addressing the Challenges of a Changing Landscape in HR
State and local governments across the country continue to enact laws addressing labor and employment, presenting difficult compliance challenges for businesses of all sizes. This is especially true for businesses operating in multiple states. Keeping track of the abundance of policies and procedures that may be affected is a serious challenge to even the most steadfast and skilled HR professionals. An effective means of HR record keeping will certainly be required in order to be successful in navigating this ever-changing HR landscape.