APPLIES TO All Employers with Employees in CA, DC, IL, MD, MN, NV, NM, OR and WA

EFFECTIVE As Indicated

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Prepare for minimum wage updates in your areas of operation as of July 1, 2024.

Discussion

On July 1, 2024, minimum wage will increase in states and localities across the country. Although not a comprehensive list, the following are key areas to review. All changes go into effect on July 1, 2024 unless otherwise noted.

 

California

• California Fast Food Restaurants: $20.00/hour (as of April 1, 2024)
• California Healthcare Workers: $18.00 – $23.00/hour (extended from June 1 to July 1, 2024)
• Alameda: $17.00/hour
• Berkeley: $18.67/hour
• Emeryville: $19.36/hour
• Fremont: $17.30/hour
• Los Angeles City: $17.28/hour; $20.32/hour for hotel workers
• Los Angeles County: $17.27/hour
• Malibu: $17.27/hour
• Milpitas: $17.70/hour
• Pasadena: $17.50/hour
• San Francisco: $18.67/hour
• Santa Monica: $17.27/hour

District of Columbia: $17.50/hour

Illinois:

• Chicago: $16.20/hour
• Cook County: $14.05/hour

Maryland

• Montgomery County: $17.15/hour (51+ employees); $15.50/hour (11-50 employees); $15.00/hour (1-10 employees)

Minnesota

• Minneapolis: $15.57/hour (1-100 employees)
• St. Paul: $15.57/hour (101-10,000 employees); $14.00/hour (6-100 employees); $12.25/hour (1-5 employees)

Nevada: $12.00/hour

New Mexico

• Santa Fe City and County: $14.60/hour (as of March 1, 2024)

Oregon

• Standard: $14.70/hour
• Portland Metro: $15.95/hour
• Nonurban Counties: $13.70/hour

Washington

• Renton: $20.29/hour (501+ employees); $18.29/hour (15-500 employees)
• Tukwila: $19.29 (15-500 employees)

 

Employers should also review tipped employee minimum wage changes, and any impact to overtime and exempt employee pay.

 

Action Items

1. Prepare to update minimum wage rates in payroll systems.
2. Notify employees of wage increases, if required.
3. Display updated minimum wage posters in the workplace and provide posters to remote workers.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

APPLIES TO All Employers with Employees in CA

EFFECTIVE May 6, 2024

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Good faith disputes over unpaid wages may shield employers from penalties for wage statement violations.

Discussion

In Naranjo v. Spectrum Services Inc., the California Supreme Court said that if an employer, in good faith, reasonably believes it is providing accurate wage statements, it may not be liable for associated penalties. Specifically, employers must provide employees with accurate and complete wage statements. Failure to do so may result in an injunction compelling compliance and an award of costs and reasonable attorney’s fees. In the case of a “knowing and intentional failure . . . to comply,” employers may be liable for statutory penalties of up to $4,000 or the employee’s actual damages.

 

Here, there was a dispute over whether premium pay for missed meal and rest periods constituted wages. In a prior ruling, the California Supreme Court said that the premium payments were wages. The employee alleged that because the premium payments were not identified on the wage statements, the employer intentionally and knowingly violated wage statement requirements by failing to include all wages paid, including the missed meal premiums.

 

The Court said that “an employer cannot incur civil or criminal penalties for the willful nonpayment of wages when the employer reasonably and in good faith disputes that wages are due.” Moreover, “if an employer reasonably and in good faith believed it was providing a complete and accurate wage statement in compliance with the requirements of [Labor Code] section 226, then it has not knowingly and intentionally failed to comply with the wage statement law.”

 

Based on the statutory wording, the Court said that the “knowing and intentional” requirement is not satisfied just because a law was violated. More specifically, a “knowing and intentional” violation does not include “a reasonable, good faith mistake about what compliance with the law requires.” (Emphasis added.) This interpretation isn’t meant to excuse ignorance of the law, but allows for reasonable, good-faith interpretations of the law as a defense to further penalties.

 

In this case, the law was unclear about whether meal premiums were considered wages until the California Supreme Court settled that issue. When the employer disputed the employee’s claim, the Court determined that the dispute was in good faith and omission of meal premiums on the wage statements was not intentional and knowing as intended by the statute.

 

Action Items

1. Review wage statements for compliance.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

APPLIES TO All Employers with Employees in CO

EFFECTIVE February 1, 2026

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Colorado’s SB 24-205 establishes broad statutory tort liability for AI algorithmic discrimination in employment decisions, requiring employers who use AI tools to implement risk management policies, conduct impact assessments, and provide detailed notices to employees and applicants.

Discussion

As a first of its kind law, Colorado’s SB 24-205 establishes statutory tort liability for AI algorithmic discrimination in employment decisions. While other jurisdictions have enacted laws regulating the use of AI technology by employers, Colorado is the first state that directly establishes a duty of reasonable care in the development and deployment of AI tools across hiring, employment and other consumer service sectors. SB 24-205 specifically requires employers who use AI tools to implement risk management policies, conduct impact assessments, and provide detailed notices to employees and applicants. The law is set to go into effect on February 1, 2026.

 

Colorado’s new law applies to machine-based algorithms that use inferential techniques to produce predictions, recommendations, decisions, or content more generally, specifically those that “make” or are a “substantial factor” in making, “a decision that has a material legal or similarly significant effect on the provision, denial, cost or terms” of any of hiring and/or employment in general, among other things. The law does not clearly define what constitutes a “substantial factor,” stating only that the AI tool falls within the scope of the law if it “assists in making” the decision at issue and is “capable of altering the outcome.”

 

Under the law, employers who build, modify or use covered AI tools owe a duty of care to all Colorado residents, to protect them from “any known or reasonably foreseeable risks” of AI-driven algorithmic discrimination. The law requires certain transparency, notice, analysis, and documentation requirements. Specifically, developers of covered AI tools must provide certain information to users including:

 

• A general statement describing the reasonably foreseeable uses and known harmful or inappropriate uses of the covered AI tool; and
• Documentation regarding the purpose of the tool, the data used to train the tool, limitations of the tool, intended benefits and uses of the tool, how the tool was evaluated for performance and mitigation of algorithmic discrimination, and any other documentation reasonably necessary to assist the user in understanding or monitoring the performance of the tool.

 

Based in part on the information they receive from developers, users or “deployers” of covered AI tools must implement a risk management policy and program to govern the use of the tool, specifying, among other things, the principles, processes and personnel who are responsible for identifying, documenting, and mitigating known or reasonably foreseeable risks of algorithmic discrimination. Deployers are also required to complete an impact assessment of the AI tool, at least annually and within 90 days after any intentional and substantial modification to the system. The law has several specific requirements for the impact analysis, including:

 

• The purpose, intended use cases, benefits and deployment context of the tool;
• A description of the categories of data the AI tool processes as inputs and the outputs the system produces;
• An analysis of whether the tool poses any known or reasonably foreseeable discrimination risks and any steps taken to mitigate those risks; and
• A description of the monitoring and user safeguards provided for the tool.

 

Impact assessments must be maintained for at least three years following deployment or modification of the tool. Employers using covered AI tools must conduct a review of the tool at least annually to ensure that it is not causing algorithmic discrimination. The law also imposes specific notice requirements: (1) a general notice published online of a summary of the AI tool and how the tool is managed for known or reasonably foreseeable risks, including the nature source and extent of the information collected and used by the tool; and (2) an additional notice to any Colorado resident who is subject to a consequential adverse decision, such as denial of employment, made by or with assistance from the tool.

 

In the adverse decision notice, the employer must provide: (1) the reason for the adverse decision; (b) the impact of the AI tool on the decision; (3) the data used by the tool in making or assisting with the decision; and (4) the sources of the data used by the tool. Employers must also provide the individual with an opportunity to “correct any incorrect personal data” that was used by the AI tool and an opportunity to appeal the adverse decision.

 

Employers should note that although Colorado’s governor signed the law, he did so with reservations. Governor Polis sent a letter to Colorado legislators encouraging them to reconsider and amend certain aspects of SB 24-205 before the law’s effective date. Specifically, the governor expressed concerns to the burden placed on businesses and the potential negative effect that the law could have on technology development. In light of these concerns, employers should continue to monitor any developments or future amendments to the law.

 

Action Items

1. Implement policies and procedures addressing the use of covered AI tools in the workplace.
2. Prepare for impact assessment and notice requirements.
3. Have appropriate personnel trained on requirements and best practices when using covered AI tools in the workplace.
4. Consult with legal counsel when developing or implementing AI tools for use in making consequential employment decisions.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

APPLIES TO All Employers with Employees in Chicago

EFFECTIVE July 1, 2024

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look The Chicago Department of Business Affairs and Consumer Protection published final rules interpreting the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which goes into effect on July 1, 2024. The final rules confirm that carryover is required under the Ordinance and provide guidance on the circumstances under which employers may deny an employee’s request for Paid Leave.

Discussion

On April 30, 2024, the Chicago Department of Business Affairs and Consumer Protection published the final rules interpreting the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which goes into effect on July 1, 2024. The Ordinance will replace the Chicago Paid Sick Leave Ordinance that is currently in effect and will provide Chicago employees with up to 40 hours of Paid Sick Leave per 12-month period, as well as an additional 40 hours of Paid Leave per 12-month period usable for any reason. Key aspects of the final rules are summarized below.

 

Definition of 12-month Period. The final rules allow employers to establish a 12-month period of the employer’s choosing, so long as the period is made of consecutive months (e.g., employee’s work anniversary, the calendar year, a contract year, or a fiscal year).

 

Carryover of Unused Leave. The final rules confirm that carryover is required under the Ordinance, and that any carryover is in addition to the Paid Leave and Paid Sick Leave the employee will earn in the next 12-month period. Employees may carry over up to 80 hours of Paid Sick Leave and up to 16 hours of Paid Leave from one 12-month period to the next.

 

In lieu of accruing time, employers may choose to frontload 10 hours of Paid Leave and 40 hours of Paid Sick Leave to employees on the first day of the designated 12-month period. The final rules indicate that frontloading the 40 hours of Paid Leave will alleviate the employer’s Paid Leave carryover obligation, but frontloading 40 hours of Paid Sick Leave will not alleviate the employer’s Paid Sick Leave carryover obligations, meaning, employers must comply with the carryover obligations for Paid Sick Leave regardless of whether applying a frontloading or accrual method.

 

Denial of Requests for Paid Leave. The final rules instruct employers to consider the following factors when evaluating the denial of an employee’s request for Paid Leave:

 

• Whether granting Paid Leave during a particular time period would significantly impact business operations;
• Whether the employer provides a need or service critical to the health, safety, or welfare of the people of Chicago;
• Whether similarly situated employees are treated the same for the purposes of reviewing, approving, and denying Paid Leave; and
• Whether the employee has meaningful access to use all their Paid Leave over the 12-month period.

 

Under the rules, any denial of Paid Leave must be in writing and must include the pre-established policy rationale for the denial. This written denial must be issued to the employee immediately upon the denial determination.

 

Using Paid Leave and Paid Sick Leave. The final rules include a new provision which allows employers to restrict use of Paid Leave or Paid Sick Leave to the employee’s regular work week, which means that employees may be prevented from accessing their otherwise available Paid Leave or Paid Sick Leave during scheduled mandatory overtime or on weekends.

 

Employer Paystub, Notice and Posting Requirements. The final rules modify several of the Ordinance’s requirements for employer notification and postings:

 

• Workplace Poster – The final rules indicate that employers must post the City-created, required workplace poster in other languages if at least 5% or more of employees at a jobsite are not literate in English.
• Employee Notification – Employers must provide a notice of the employer’s Paid Leave and Paid Sick Leave policies with the first paycheck subject to the Ordinance or prior to the commencement of the employee’s employment. Annually thereafter, employers must provide a similar notice, by paper or electronic means, to employees with a paycheck issued within 30 days of July 1.
• Frontloading Notification – If the employer frontloads time, the final rules instruct the employer to make written notification of the fact and the availability of hours to employees at the beginning of the 12-month period.

 

Action Items

1. Review the final rules here.
2. Revise Paid Leave and Paid Sick Leave policies and procedures for compliance with final rules.
3. Have appropriate personnel trained on requirements for Paid Leave and Paid Sick Leave.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

APPLIES TO All Employers with Employees in MN

EFFECTIVE As Indicated

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Paid sick leave is expanded in coverage and usage. Recordkeeping, documentation, and employee notice obligations are clarified for paid sick leave. Paid family leave provisions are clarified, including definitions, usage, wage replacement, for small employers, and private plans.

Discussion

Omnibus and appropriations bill HB 5247 recently amended the paid sick leave and paid family leave laws. The following is a summary of key changes.

 

Paid Sick Leave

 

Article 11 of the bill provides a number of amendments to the paid sick leave law that went into effect January 1, 2024. The amendments are effective as of May 25, 2024 unless otherwise stated.

 

Penalties. If an employer does not provide or allow employees to use their paid sick leave, the employer will be liable for that amount of time plus liquidated damages. Additionally, if the employer does not maintain records to identify the amount of paid sick leave an employee should have been provided, the employer is liable for 48 hours of paid sick leave for each year it was not provided, plus liquidated damages.

 

Payment of Sick Leave. Employees must be paid for sick leave at their “base” rate of pay, rather than their “hourly” rate of pay.

 

Employee Definition. “Employee” means any person who is employed by an employer, including temporary and part-time employees, who is anticipated by the employer to perform work for at least 80 hours in a year for that employer in Minnesota.

 

Reasons for Leave. Paid sick leave can also be used to make arrangements for or attend funeral services or a memorial, or address financial or legal matters that arise after the death of a family member.

 

Documentation. Employers may require documentation to show that the paid sick leave is being used for a covered reason if the person is absent for more than three consecutive scheduled workdays.  However, if documentation cannot be obtained in a reasonable time or without added expense, then reasonable documentation may include a written statement from the employee indicating that the paid sick leave is being used for a qualifying purpose.

 

Usage. Paid sick leave may be used in the same increment of time for which employees are paid, at a minimum of 15-minute increments, but no more than four-hour increments.

 

Notice. At the end of each pay period, employers must provide employees with written or electronic notice of the number of paid sick leave hours used in the pay period and the number of paid sick leave hours available.

 

Records. As of July 1, 2024, employers must keep paid sick leave records for three years.

 

Extended Benefits. As of January 1, 2025, all paid time off provided in excess of the minimum requirement for personal illness or injury must meet or exceed the minimum statutory requirements for paid sick leave. It is unclear if this means that the full protections of paid sick leave will apply to other paid time off benefits.

 

Paid Family Leave

 

Article 73 of the bill provides a number of amendments to the paid family law going into effect January 1, 2026. The amendments are effective as of May 25, 2024 unless otherwise stated.

 

Definitions. A number of key terms were clarified, such as “benefit year,” “covered employment,” “covered individual,” and “effective date of leave.” Notably, “family member” now includes the child of a domestic partner and a de facto custodian.

 

Initial Paid Week. Many state programs have an unpaid first week before benefits are paid. Minnesota has a retroactively paid first week of benefits. Specifically, the seven days of benefits is paid after those first seven days have occurred and payment is included in the first benefit payment.

 

Usage. Leave must be taken in a minimum increment no greater than one calendar day. Intermittent leave may be taken any time after the first 30 days of leave, or sooner if at least 8 hours of leave have accrued.

 

Eligibility. As of November 1, 2025, employees are not eligible for leave benefits while they are incarcerated or receiving unemployment benefits.

 

Wage Replacement. As of November 1, 2025, employers may supplement paid family leave benefits up to 100% of the employee’s usual salary.

 

Disability Insurance. As of November 1, 2025, an employee may receive disability insurance payments in addition to family and medical leave benefits provided the employee is concurrently eligible for both benefits. Disability insurance benefits may be offset by family and medical leave benefits paid to the employee pursuant to the terms of a disability insurance policy.

 

Appeals. As of November 1, 2025, a detailed appeals process will be in effect.

 

Private Plans. As of July 1, 2025, benefits coverage of former employees applies until the individual is hired by a new employer or 26 weeks pass, whichever occurs first; and if an application for leave is filed by a former employee to a private plan, the plan pays benefits for the totality of the leave. Private plans may not cut off eligibility for a former employee during the course of an approved leave.

 

Small Employer Premium Rate. As of July 1, 2024, small employers are eligible for premium rates if the employer: (1) has 30 or fewer employees; and (2) the average wage for that employer is less than or equal to 150% of the state’s average wage in covered employment for the basis period. The premium rate for eligible small employers is 75% of the annual premium rate. Employers must pay a minimum of 25% of the rate and cannot deduct from any employees’ pay to fund the employer portion of the premium. Employees must pay the remaining portion due through wage deductions if it is not paid by the employer.

 

The Paid Family Leave FAQ was also recently updated with information about wage detail reports. Notably, the first wage detail reports will be due on October 31, 2024, and will be based on wages paid between July 1, 2024, and September 30, 2024. Every quarter, employers are required to submit a report to the state that details wages paid to their employees. Paid Leave needs this information to support administration of the program.

 

Action Items

1. Update paid sick leave policies for compliance.
2. Have appropriate personnel trained on all requirements.
3. Update payroll procedures for payment of paid sick leave and include paid sick leave on paystubs.
4. Update recordkeeping procedures.
5. Prepare for compliance with paid family leave requirements.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase