APPLIES TO All Employers with Independent Contractors in AL

EFFECTIVE December 31, 2025

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

Quick Look SB 86 provides for new portable benefit accounts for independent contractors. A portable benefit account is defined as an account owned by the independent contractor for the “purpose of funding the purchase of one or more benefit plans, including, but not limited to, plans that provide health benefits, income replacement insurance, life insurance, or retirement benefits.”

Discussion

Effective December 31, 2025, SB 86 provides for new portable benefit accounts for independent contractors. A portable benefit account is defined as an account owned by the independent contractor for the “purpose of funding the purchase of one or more benefit plans, including, but not limited to, plans that provide health benefits, income replacement insurance, life insurance, or retirement benefits” and is administered by a portable benefit account provider. The provider can be a bank, investment firm, or technology or program manager that offers these services through a bank or investment firm.

 

This is a voluntary system that encourages businesses to provide more support to vendors and gig workers. Most importantly, participation does not change the worker’s independent contractor status. Any entity, even an app-based entity, can make contributions to a portable benefit account. Contributions are tax deductible as a business expense against Alabama income tax. An independent contractor can also deduct the contribution as an adjustment to income on the individual Alabama income tax return, which means it is excluded from gross income.

 

Both the hiring party and independent contractor can agree that the contribution is either a form of income or, subject to a written agreement, a percentage of funds withheld from compensation owed to the independent contractor. The written agreement must state:

 

• the withholding of compensation is expressly agreed to by both parties;
• the withholding of compensation is voluntary and requires the independent contractor to opt in;
• the requirements must be clearly, unambiguously, and prominently stated within the services contract or in a separate notice; and
• the independent contractor can opt out at any time.

 

The new law is a rare benefit for both businesses and independent contractors.

 

Action Items

1. Review and update independent contractor agreements with legal counsel, if voluntarily complying with the law.

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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. © 2025 ManagEase

APPLIES TO As Indicated

EFFECTIVE As Indicated

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

Quick Look The Colorado Wage Act was amended to increase employer penalties for independent contractor misclassification and administrative claim awards; permit local enforcement of the Act; require publication of information about violators of the Act; expands the definition of employer; prohibits payroll deductions below the applicable minimum wage; expands retaliation protections; and implements a safe harbor for penalties if missing compensation is paid within 14 days of receiving a demand. Local governments may increase minimum wages taking into account the state tip credit amount. FAMLI was expanded to provide an additional 12 weeks of leave to care for a child in a NICU. Premium payments will also decrease to 0.88% of an employee’s wage. The definition of gender expression under CADA was expanded to include an employee’s chosen name and how the individual chooses to be addressed. CADA remedies for disability discrimination were expanded.

Discussion

The Colorado legislature recently enacted a number of bills impacting employers. Key changes are highlighted below.

 

Colorado Wage Act

 

As of August 6, 2025, HB 25-1001 amends the Colorado Wage Act in several respects.

 

Misclassification Penalties. Penalties for misclassifying an employee as an independent contractor will apply depending on the severity of the violation: $5,000 for a willful violation; $10,000 if the violation is not corrected within 60 days of a determination of misclassification; $25,000 for a subsequent willful violation within five years; and $50,000 for a subsequent willful violation that remains uncorrected after 60 days. Penalty amounts will be adjusted for inflation every two years beginning in 2028.

 

Administrative Claim Awards. The Colorado Department of Labor and Employment Division of Labor Standards and Statistics will be able to issue a maximum award for administrative claims of $13,000 from July 1, 2026 to December 31, 2027, an increase of the current $7,500 maximum. The amount will increase every two years by at least $1,000 beginning in 2028.

 

Local Enforcement. Going forward, the Colorado Wage Act may be enforced by those who are delegated authority by a county or city, meaning that enforcement may occur at multiple levels not just at the state level.

 

Publication of Violators. The Division must publish on its website the names of all employers found to be in violation of the Act and whether the violation was willful. If the violation was willful and is not remedied within 60 days after the Division’s determination, the Division must notify all government bodies, with the authority to remove or withhold an employer’s license, permit, registration, or other credential, about the unremedied willful violation for possible further action.

 

Expanded Definition of Employer. The bill amends the definition of “employer” for purposes of wage and hour laws to include an individual who owns or controls at least 25% of the ownership interest in an employer, except for minority owners who have fully delegated their authority to control day-to-day operations.

 

Payroll Deductions Limited. The bill prohibits employers from making a payroll deduction below a worker’s applicable minimum wage, not just the federal minimum wage.

 

Retaliation Protections Expanded. Retaliation under the Act is prohibited by employers and now those contracted with employers or workers, directly or indirectly; and retaliation protections are extended to employees and “worker[s],” including for good faith reports regarding compliance concerns and providing information around rights and remedies under wage and hour laws. Remedies for violations may now include compensatory damages. Additionally, there is a potential presumption that if retaliation occurs within 90 days of the protected activity, the timing alone may be enough for a finding of retaliatory intent. Employers may not use an employee’s immigration status to discriminate or retaliate against them for engaging in protected activity. The Division may now order payment of attorneys’ fees and costs for violations.

 

Penalty Safe Harbor. Generally, if an employer fails to pay owed compensation within 14 days of a written demand or claim, the employer is liable for automatic penalties. Now, the Division may waive the penalty if the employer pays all claimed compensation within 14 days of the written demand or claim. This safe harbor is not available for a second or subsequent failure to pay within five years.

 

Tip Credit Changes

 

HR 25-1208 makes changes to tip credit requirements associated with local governments. As of July 1, 2025, local governments may establish local minimum wages in excess of the statewide minimum wage. If they do so, local governments must provide a tip offset for tipped employees of $3.02.

 

As of January 1, 2026, a local government that has enacted a minimum wage higher than the state minimum wage may increase the amount of the tip offset associated with the local minimum wage, except the tip offset cannot cause a tipped employee to earn less than the state minimum wage minus $3.02.

 

FAMLI Changes

 

As of August 6, 2025, SB 25-144 makes changes to the Colorado Family and Medical Leave Insurance (FAMLI) law. Beginning in 2026, employees may take an additional 12 weeks of leave time for a child receiving care in a neonatal intensive care unit (NICU), allowing for a total of 24 weeks when combined with the original 12 weeks of leave entitlement.

 

Premium payments from employee paychecks for FAMLI benefits will decrease in 2026 from the current rate of 0.9% to 0.88% of wages per employee. Going forward, the rate will be adjusted each year, not to exceed 1.2% of wages per employee.

 

Gender Expression Protections Expanded

 

Gender expression is currently protected under the Colorado Anti-Discrimination Act (CADA). As of May 16, 2025, HB 25-1312 expands the definition of gender expression to include an employee’s chosen name and how the individual chooses to be addressed. The chosen name is one that an individual requests to be known as in connection to their disability, race, creed, color, religion, sex, sexual orientation, gender identity, gender expression, marital status, familial status, national origin, or ancestry, as long as the name does not contain offensive language and the individual is not requesting the name for “frivolous purposes.”

 

CADA Remedies Expanded

 

As of May 22, 2025, HB 25-1239 expands remedies available for disability discrimination in places of public accommodation or a violation of civil rights under CADA for disability discrimination. The allowable remedies are a court order requiring compliance with the applicable section of CADA, attorneys’ fees and costs, and either actual monetary damages and damages for noneconomic loss or injury or a statutory fine of $5,000 that is payable to each plaintiff for each violation. An award of damages for noneconomic loss or injury is capped at $50,000, and a defendant employer is entitled to a 50% reduction of the award cap if the employer corrects the violation within 30 days of the complaint being filed and if it did not knowingly or intentionally make the violation. An employer that cannot correct the violation in 30 days, but shows a good faith effort to correct it, may be allowed up to three additional 30-day periods to correct the violation and be entitled to the 50% reduction of the award cap.

 

Action Items

1. Review independent contractor classifications with legal counsel.
2. Review payroll deduction procedures for compliance.
3. Have handbook policies updated to address retaliation, FAMLI leave, and anti-discrimination protections.
4. Have appropriate personnel trained on applicable requirements.
5. Audit payroll to comply with tip credit changes.

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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. © 2025 ManagEase

APPLIES TO Employers with Employees in KY

EFFECTIVE June 27, 2025

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

Quick Look Two new Kentucky laws make significant changes to the state’s Occupational Safety and Health Act, such as implementing a six-month statute of limitations, adding a de minimis category for minor administrative violations, and removing deference for agency interpretations of the law. Emergency regulations implementing these changes are in place, while proposed rules are open to public comment.

Discussion

As of June 27, 2025, Kentucky enacted sweeping changes to its Occupational Safety and Health Act, bringing the state’s workplace safety regulations into closer alignment with federal OSHA standards. These changes, introduced through HB 398 and SB 84, mark a significant shift in how occupational safety is regulated and enforced for private employers operating within the state.

 

HB 398 revises several key provisions of Kentucky’s safety laws. Among the most notable changes is the introduction of a formal statute of limitations for issuing citations, now set at six months. The bill also introduces a new de minimis category for minor administrative violations that do not directly impact worker safety.

 

Employers now have the right to recover legal fees if they successfully appeal a citation, and only individuals with personal knowledge of a workplace hazard may report it. Additionally, the law now permits non-employee third parties to accompany inspectors during workplace evaluations, a move intended to enhance the thoroughness of inspections.

 

SB 84 complements these changes by altering how courts review decisions made by state agencies. Under the new law, courts will apply a “de novo” standard, meaning they will no longer defer to the agency’s interpretation of the law. This change aligns Kentucky with the U.S. Supreme Court’s decision in Loper Bright v. Raimondo, which similarly curtailed agency deference at the federal level.

 

In response to the new laws, the Kentucky Occupational Safety and Health Standards Board has begun amending and repealing various state-specific regulations to ensure consistency with federal rules. Emergency updates have already been implemented, and public hearings are scheduled to finalize these changes. The Education and Labor Cabinet also revised its Compliance Field Operations Manual and issued six new Program Instructions to clarify the updated requirements and cancel outdated guidance.

 

Action Items

1. Review and update internal safety policies.
2. Have appropriate personnel trained on revised reporting and inspection procedures.
3. Consult with legal counsel on appeals process and judicial review standards.

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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. © 2025 ManagEase

APPLIES TO All Employers with Employees in MA

EFFECTIVE June 13, 2025

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

Quick Look The Massachusetts Supreme Judicial Court ruled non-solicitation agreements with forfeiture provisions are not subject to the state’s strict noncompetition law.

Discussion

In Miele v. Foundation Medicine, the Massachusetts Supreme Judicial Court ruled non-solicitation agreements with forfeiture provisions are not subject to the state’s strict noncompetition law. Here, an executive for the defendant company signed a restrictive covenant agreement which included a non-solicitation clause barring recruiting of company employees for one year after separation from employment. When leaving the company, the plaintiff employee then signed a transition agreement which also added a forfeiture of $1 million in benefits for breach of the non-solicitation agreement. Within the one-year limitation period, the executive was accused of recruiting several employees from the employer who demanded repayment of the forfeiture amount and stopped transition payments. The executive sued for breach of the transition agreement.

 

Although a lower court ruled in the executive’s favor that the forfeiture clause was subject to the state’s noncompetition law, the Supreme Judicial Court reversed the ruling. The court also viewed the case in light of the Massachusetts Noncompetition Agreement Act (MNAA), which specifically excludes non-solicitation agreements from its definition of noncompetition agreement. The forfeiture clause was part of the non-solicitation agreement, so the MNAA did not apply.

 

The court’s ruling was especially significant in that it clarified that non-solicitation agreements are not subject to the MNAA even if they include a forfeiture clause. This is consistent with the MNAA’s specific exclusion of non-solicitation agreements and other restrictive covenants that are specifically not non-competition agreements. Employers should still consult with legal counsel when drafting non-solicitation agreements, since a poorly drafted non-solicitation agreement could contain provisions which run afoul of the MNAA.

 

Action Items

1. Review non-solicitation agreements and other restrictive covenants with legal counsel.

 

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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. © 2025 ManagEase

APPLIES TO Employers with 11+ Employees in NE

EFFECTIVE October 1, 2025

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

Quick Look Effective October 1, 2025, LB 415 amends the Healthy Families and Workplace Act (HFWA) to limit its applicability while also changing accrual rates and creating credits for employers who already provide paid sick leave to their employees.

Discussion

LB 415 amends the Healthy Families and Workplace Act (HFWA) to limit its applicability while also changing accrual rates and creating credits for employers who already provide paid sick leave to their employees. Nebraska’s paid sick leave law was one of the handful of voter-initiated paid sick leave laws that came out of the November 2024 election cycle. With the amendment, the HFWA still goes into effect October 1, 2025, but with a few less onerous requirements for employers.

 

Applicability. Employers with 10 or fewer employees are now exempt from the law. A small employer is now defined as having between 11 to 19 employees. There is still ambiguity as to whether employers count their workforce in Nebraska or also include out-of-state employees.

 

Exclusions. Individuals who work as seasonal or temporary agricultural workers are excluded from coverage, as are individuals under 16 years old.

 

Accrual. New employees start to accrue paid sick time after they have completed 80 hours of consecutive employment in Nebraska. Accrual also is not retroactive after meeting the initial waiting period.

 

Employer Credit. Paid sick time provided to employees on or after January 1, 2025 and before October 1, 2025 are counted toward an employer’s obligations under the HFWA for 2025.

 

Termination. Unused paid sick time is not required to be paid out upon an employee’s separation from employment.

 

Private Plans. Employers with paid leave policies do not have to allow an employee to accrue or carry over benefits beyond their existing paid leave policy.

 

Enforcement. The amendment removed an employee’s private right of action. The sole remedy is to file a complaint with the Nebraska Department of Labor.

 

Action Items

1. Update paid leave policies for compliance.
2. Update payroll processes to reflect paid leave requirements.
3. Have appropriate personnel trained on the 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. © 2025 ManagEase