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2 Tech Flex: June, 2017 Volume VI Topics Covered In This Issue DOL Walks Back Obama-Era Worker Classification and Joint Employer Guidance Arizona Updates Frequently Asked Questions on Fair Wages and Healthy Families Act Maryland Sick and Safe Leave Bill Vetoed Minnesota Governor Vetoes Prohibitions on Local Minimum Wage and Benefits Nevada Amends Garnishment Exempt Amount Nevada Governor Vetoes Paid Sick Leave Bill Bill to Increase Minimum Wage Vetoed in Nevada New Hampshire Modifies Wage Payment Frequency Requirements New York Announces Paid Family Leave Employee Contribution Rate New Pay Equity Law Enacted in Oregon Ohio Court Voids State Prohibition on Local Minimum Wages Tennessee Amends Employee Wage Payment Frequency Mandates Texas Enacts Leave Rights for Foster Children Vermont Modifies Child Support Withholding Order Remittance Additional Villages/Cities Opt Out of Cook County Mandates Chicago Adjusts Tipped Employee Cash Wages Kansas City, MO Adopts Minimum Wage Ordinance Long Beach, CA Increases Minimum Wage for Hotel Workers New York City Passes Series of Fair Work Week Laws San Francisco Provides Guidance on Paid Parental Leave July 1, 2017 Minimum Wage Increase Reminder 2

3 Tech Flex: June, 2017 Volume VI 3 DOL WALKS BACK OBAMA-ERA WORKER CLASSIFICATION AND JOINT EMPLOYER GUIDANCE On June 7, 2017, the United States Department of Labor ( DOL ) issued a short statement announcing that it was rescinding Obama-era guidance on (1) when workers should be classified as employees instead of independent contractors, and (2) when two or more businesses will be considered joint employers. Specifically, the DOL stated: U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department s long-standing regulations and case law. The 2015 and 2016 informal administrator interpretations generally expanded the circumstances under which workers would be considered employees for purposes of federal wage and hour law liability. The 2015 guidance, entitled Administrator s Interpretation No titled The Application of the Fair Labor Standards Act s Suffer and Permit Standard in the Identification of Employees Who are Misclassified as Independent Contractors, took the position that most workers were employees, not independent contractors. This interpretation broadened the test that had been relied upon by most courts, which looked at the economic realities of the extent to which a worker was dependent upon a business. The 2016 guidance, Administrator s Interpretation No , addressed situations in which two or more employers could be considered to jointly employ a worker, and thus jointly liable for any violations of either the Fair Labor Standards Act ( FLSA ) and the Migrant and Seasonal Agricultural Worker Protection Act ( MSPA ). This guidance opined that the concept of joint employment should be interpreted broadly, including the possible expansion of liability for violations of franchisees or subcontractors. While the withdrawal of these administrator interpretations lends some clarity to the joint employer and independent contractor standards in the context of the FLSA and MSPA, the broad view of joint employment taken by the National Labor Relations Board under the National Labor Relations Act ( NLRA ) in its controversial Browning-Ferris Industries decision is unaffected. Similarly, the patchwork of standards applicable to joint employment and independent contractor issues under other federal laws such as Title VII, as well as different state laws, is also unchanged. For a copy of the DOL statement please click on the link provided below: 3

4 Tech Flex: June, 2017 Volume VI 4 ARIZONA UPDATES FREQUENTLY ASKED QUESTIONS ON FAIR WAGES AND HEALTHY FAMILIES ACT It was previously reported in the March 2017 Tech Flex(link below) that the Arizona Industrial Commission of Arizona (ICA) issued a list of frequently asked questions (FAQs) on the Fair Wages and Healthy Families Act (Prop. 206). The ICA has now updated these FAQs. Background: On November 8, 2016, voters in Arizona approved the Proposition 206 that raised the minimum wage from $8.05 per hour as follows: $10.00 per hour, effective January 1, 2017; $10.50 per hour effective, January 1, 2018; $11.00 per hour effective January 1, 2019; and $12.00 per hour effective January 1, Employers are still allowed to pay tipped employees $3.00 less per hour, if combined wages plus tips are not less than the minimum wage rate. In addition, Proposition 206 provides that an employee beginning July 1, 2017 accrues a minimum of one hour of earned paid sick time for every 30 hours worked. Purposes for which employees may use earned paid sick time include the following (list is not exhaustive): Employee s mental or physical illness; Employees need for medical diagnosis; Care for family member with a mental or physical illness; Care of family member in need of medical diagnosis; Employees place if business being closed due to a public health emergency; Care for a child whose school has been closed due to a public health emergency; Medical attention needed for employee or family member to recover from domestic violence, sexual violence or stalking. Family Member for which paid sick time may be used includes: Regardless of age, biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, a child to whom the employee stood in loco parentis, or an individual to whom the employee stood in loco parentis when the individual was a minor; A biological, foster, stepparent, or adoptive parent or legal guardian or an employee or an employee s spouse or domestic partner or a person who stood in loco parentis when the employee or employee s spouse or domestic partner was a child; A spouse legally married under any state law or a domestic partner of an employee as registered under the laws of any state or political subdivision; A grandparent, grandchild or sibling (whether of a biological, foster, adoptive or step relationship) of the employee or employee s spouse or domestic partner; 4

5 Tech Flex: June, 2017 Volume VI 5 Any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship. Updated FAQs On May 19, 2017, the ICA updated the FAQs to include more information on both the minimum wage and earned paid sick time provisions. For a copy of the ICA FAQs and please paste the following into your browser. For a copy of the March 2017 please click on the link below. MARYLAND SICK AND SAFE LEAVE BILL VETOED On May 25, Maryland Governor Larry Hogan vetoed House Bill 1 (H.B. 1) that if enacted would have required employers with 15 or more employees to provide employees with earned sick and safe leave paid at the same wage rate as the employee normally earns. Employers with 14 or fewer employees would be required to provide unpaid earned sick and safe leave. Among other things, the leave would accrue at the rate of one hour for every 30 hours worked, with an accrual cap of 40 hours per year and a use cap of 64 hours in a year. In announcing Hogan made reference to his "commitment to providing common sense paid sick leave for Maryland workers." He appealed to legislative leaders to work with his administration on a compromise by January, when H.B. 1 was set to take effect. Hogan pointed to the "common sense" paid sick leave proposal that he had unveiled in December 2016, which he said "would provide benefits that hardworking Marylanders deserve without hurting the state s economy and costing jobs." That proposal would require companies with more than 50 employees to provide paid sick leave of 40 hours a year. Hogan s proposal, instead of requiring small businesses (defined by widely accepted federal standards) to offer paid sick leave, would merely encourage them to do so by providing tax incentives to offset the costs of those benefits. According to the governor, his proposal, in contrast to H.B. 1, has the potential to cover 100 percent of Maryland s workforce. It is important to note that a three-fifths vote of the membership in each legislative chamber is required to override Hogan s veto of H.B. 1. Given that the final version of the bill cleared the Senate with a vote and House by an ballot, an override may be on the horizon. It would take 29 votes in the Senate and 84 votes in the House to override the governor s veto. 5

6 Tech Flex: June, 2017 Volume VI 6 MINNESOTA GOVERNOR VETOES PROHIBITIONS ON LOCAL MINIMUM WAGE AND BENEFITS Minnesota Governor Mark Dayton has vetoed a bill (S.F. 3) passed by the state legislature as part a budget package that would preempt local governments ability to set wage and benefit levels higher than state law. In comments accompanying the veto, Governor Dayton stated in part as follows: The role of state government is to set minimum standards for workplace protections, wages, and benefits, not maximums, Should local officials, who were elected by their constituents in their communities, approve higher wage and benefit levels to meet the needs of their residents, they ought to retain the right to do so. Local governments can be more adept at responding to local needs with ordinances that reflect local values and the unique needs of their communities. It is important to note that S.F. 3 cleared the state senate on May 24 by a vote; it passed the House on May 25 with a ballot. Since a two-thirds vote in the Senate (45 votes) and the House (90 votes) is required to override the governor s veto, it appears unlikely the veto will be overridden. NEVADA AMENDS GARNISHMENT EXEMPT AMOUNT On June 3, 2017, Nevada Governor Brian Sandoval signed into law Senate Bill 230 (SB 230) which, among other changes, increases the percentage of disposable earnings subject to exemption from garnishment and increases the period for during which garnishment order served on an employer can continue. Under current law, 75 percent of a judgment debtor s disposable earnings for any workweek is exempt from execution unless the weekly take-home pay is less than 50 times the federal minimum hourly wage, in which case the entire amount may be exempt. SB 230 increases the exemption to 82 percent of a judgment debtor s disposable earnings for any workweek if the gross weekly salary or wage of the debtor on the date the most recent garnishment order was issued was $770 or less. However, if the gross weekly salary or wage of the debtor on the date the most recent garnishment order was issued exceeded $770, SB 230 maintains the exemption at 75 percent of a judgment debtor s disposable earnings for any workweek. Existing law generally provides that if the employer of a judgment debtor whose earnings are being garnished is a garnishee, the garnishment order served on the employer continues for the earlier of 120 days or until the amount demanded in the writ is satisfied. SB 230 extends such a period to the earlier of 180 days or until the amount demanded in the writ of garnishment is satisfied. The provisions of SB 230 are effective October 1, For a copy of SB 230, please click on the link provided below. 6

7 Tech Flex: June, 2017 Volume VI 7 NEVADA GOVERNOR VETOES PAID SICK LEAVE BILL On June 1, 2017, Nevada Governor Brian Sandoval vetoed Senate Bill 196 (SB 196). SB 196 if enacted as of January 1, 2018, would have required businesses with 25 or more employees that have operated in Nevada for 12 consecutive months to provide to full-time employees at least 24 hours, equivalent to three work days, of paid sick leave a year. Workers would become eligible for the benefit after three months on the job. In his veto, message, Governor Sandoval stated in part as follows: SB 196 presents a substantial economic burden on small business, upsets competition for employees, and could hinder Nevada s business friendly reputation. BILL TO INCREASE MINIMUM WAGE VETOED IN NEVADA On June 8, 2017, Nevada Governor Brian Sandoval vetoed a minimum wage bill that would have increased the minimum wage by 75 cents each year for five years or until the minimum wage reached $12 or more ($11 if the employer offered health insurance). SB 106, which was passed by the Senate on a 12-9 vote May 17 and by the House on a vote June 5, would have been effective January 1, In his veto message, Governor Sandoval stated that "SB 106, although commendable in its attempt to extend high wages for Nevada workers, would place a significant burden on the State s small business employers at a time when they are emerging from a downturn that cost hundreds of thousands of jobs and closed the doors of businesses across the State." Current law remains in effect: The 2006 Minimum Wage Amendment to the Nevada Constitution requires the minimum wage to be recalculated and adjusted each year effective July 1 based on increases in the federal minimum wage, or, if greater, by the cumulative increase in the cost of living. The Nevada Office of the Labor Commissioner had announced on March 31, 2017 that the minimum wage requirements would not be increased as of July 1, Specifically the minimum wage for employees who receive qualified health benefits from their employer will remain at $7.25 per hour and the minimum wage for employees who do not receive health benefits will remain at $8.25 per hour. In addition, daily overtime rate requirements will also remain the same as of July 1, Employees who receive qualified health benefits from their employer and earn less than $ per hour, and employees earning less than $ per hour who do not receive qualified health benefits must be paid overtime whenever they work for more than eight hours in a 24-hour period. Nevada is one of a few states with a daily overtime requirement in addition to the requirement that employees be paid overtime for working more than 40 hours in a workweek. Overtime requirements do not apply to exempt employees. 7

8 Tech Flex: June, 2017 Volume VI 8 NEW HAMPSHIRE MODIFIES WAGE PAYMENT FREQUENCY REQUIREMENTS On May 12, 2017, New Hampshire Governor Chris Sununu signed into law House Bill 194 that permits employers to pay wages to employees weekly or biweekly Currently, New Hampshire law requires that employers must pay all wages due to employees within 8 days including Sunday after expiration of the week in which the work is performed. Among the changes, House Bill 194 amends RSA 275:43 as follows: The section heading of RSA 275:43 now includes a specific reference to biweekly ; Replacement in the introductory paragraph of RSA 275:43 of the reference to within 8 days including Sunday after expiration of the week in which the work is performed with language permitting payment at regular intervals not to exceed 14 days; Amendment of RSA 275:43, IV and RSA 275:43, IV-a(a) to include a specific reference to biweekly payment frequency. Inclusion of a new paragraph after paragraph IV-of RSA 275:43 as follows IV-b. The commissioner may, on a temporary basis and after showing good and sufficient reason, require payment of wages weekly. The commissioner shall prescribe to the employer the terms, conditions, and duration of such temporary payments. Such restrictions shall only be in effect until the employer rectifies any deficiencies prescribed by the commissioner. The change to the law becomes effective on July 11, 2017, For a copy of House Bill 194, please click on the link provided below: Introduced.html NEW YORK ANNOUNCES PAID FAMILY LEAVE EMPLOYEE CONTRIBUTION RATE As previously reported, New York Governor Andrew Cuomo on April 4, 2016, signed into law legislation as part of the state budget that provides the nation s first 12- week paid family leave policy. The New York benefits will be phased-in beginning in 2018 at 50 percent of an employee s average weekly wage, capped to 50 percent of the statewide average weekly wage, and fully implemented in 2021 at 67 percent of an employee average weekly wage, capped to 67 percent of the statewide average weekly wage. Some other highlights of the program are as follows: Eligible employees will be able to take paid leave to: o Bond with a new child (including an adopted or foster child) within the first 12 months after the birth, adoption, or placement; o Provide physical or psychological care for the serious health condition of the employee s child, spouse, domestic partner, parent (including 8

9 Tech Flex: June, 2017 Volume VI 9 stepparent or legal guardian), parent-in-law, sibling, grandchild, or grandparent; or o Address certain exigent needs when a spouse, domestic partner, child, or parent of the employee is called to active military service. Paid leave time may be taken intermittently in increments of one full day or one fifth of the weekly benefit. Employers may require paid leave under the law to run concurrently with any unpaid leave to which an employee is eligible under the federal Family and Medical Leave Act ( FMLA ). Provides job protection guarantees for all employees taking leave and requires the continuation of health care benefits during the leave period. The program will be funded entirely through a nominal payroll deduction. Employees are eligible to participate after having worked for their employer for six months. Employees must also provide their employers with written notice and proof of the need for family leave from the family leave care recipient s healthcare provider. Further, family leave care recipients may be required to undergo a physical examination by a qualified healthcare provider for additional verification. Employers will be required to conspicuously post notice indicating that they have complied with the paid family leave requirements and must provide employees who take paid family leave for more than seven consecutive days a written notice of their rights under the law. Penalties for noncompliance with the notice requirements include monetary fines ranging from $100 to $2,000 and/or potential imprisonment. The New York Paid Family Leave legislation requires that by June 1, 2017 and on September 1 each year after, the Department of Financial Services (DFS) must publish the maximum employee contribution that an employer is authorized to collect from each of its employees to fund Family Leave Benefits. On June 1, 2017 the DFS announced that the weekly contribution rate for Paid Family Leave Benefits is 0.126% of the employee s weekly wage (capped at New York State s current average weekly wage of $1,305.92). Consequently, the maximum contribution would be $1.65 per week per employee for coverage beginning January 1, Deductions from employee wages to pay for the 2018 coverage period may commence on July 1, For a copy of the DFS announcement, please paste the following into your browser: For more information on the New York Paid Family Leave program, please click on the link provided below. 9

10 Tech Flex: June, 2017 Volume VI 10 NEW PAY EQUITY LAW ENACTED IN OREGON Oregon Governor Kate Brown signed the Oregon Equal Pay Act of 2017 (the Act ) into law on June 1, The Act precludes employers from paying employees in protected classes differently from other employees for work requiring substantially similar knowledge, skill, effort, responsibility, and working conditions. Compensation covered by the Act includes wages, salary, bonuses, benefits, fringe benefits and equity-based compensation. The protected categories covered by the Act include race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, and age. Pay differences may be permissible, however, if they are based on certain permissible factors. These factors include: 1. A seniority system; 2. A merit system; 3. A system that measures earnings by quantity or quality of production, including piece-rate work; 4. Workplace locations; 5. Travel, if travel is necessary and regular for the employee; 6. Education; 7. Training; 8. Experience; or 9. Any combination of these factors if the combination accounts for the entire compensation differential. Employers may not comply with the Act by reducing the compensation of current employees. Employees who believe that they have been subjected to discrimination in compensation in violation of the Act will be entitled to sue their employers beginning on January 1, An employer has a defense to such an action, however, if it can show that it completed, within three years before the date that the employee filed the action, an equal-pay analysis of the employer s pay practices in good faith that was reasonable in detail and in scope in light of the size of the employer, related to the protected class asserted by the plaintiff in the action; and eliminated the wage differentials for the plaintiff and has made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff. Beginning on October 9, 2017, the Act also bans employers from requesting information about an applicant s prior salary history, or basing compensation based on the applicant s salary history. The Oregon Board of Labor and Industries will be able to enforce and issue fines under the Act as of that date. Employees or applicants who believe that they have been impermissibly asked about prior compensation in violation of the Act will be entitled to sue employers beginning on January 1,

11 Tech Flex: June, 2017 Volume VI 11 OHIO COURT VOIDS STATE PROHIBITION ON LOCAL MINIMUM WAGES It was previously reported in the January 2017 Tech Flex that on December 19, 2016, Ohio Gov. John Kasich signed a bill (SB 331) blocking local governments from raising the minimum wage above the level set by the state. SB 331 in part stated as follows: The General Assembly finds that the regulation of the employment relationship between an employer and the employer's employees as it pertains to hours of labor and fringe benefits is a matter of statewide concern that requires uniform statewide regulation. Many employers in this state operate in multiple political subdivisions. Consequently, the General Assembly finds that permitting individual political subdivisions to enact their own requirements for private employers concerning hours of labor and fringe benefits creates additional and unnecessary costs on employers, diminishes employers' flexibility to respond to changing economic conditions, adversely affects employees' job flexibility, impairs economic growth, and impedes employers' ability to operate competitively both in Ohio and elsewhere. By enacting section of the Revised Code, it is the intent of the General Assembly to exclusively regulate the hours of labor and fringe benefits arising from the employer employee relationship. On June 3, 2017, an Ohio Court of Common Pleas Judge Richard Frey struck down SB 331 as unconstitutional citing the one-subject rule in the Ohio Constitution. However, it is important to note the judge did not rule on the merits of the law, that is whether the state could prohibit local minimum wages in excess of the Ohio state limit. Instead, the judge determined that including the minimum-wage provision into SB 331, which dealt with two other issues, violated a rule prohibiting bills from dealing with multiple subjects. The primary purpose of SB 331 was to regulate the sale of dogs from pet stores and pet retailers, but lawmakers also tacked on unrelated laws pertaining to the minimum wage and to a municipality's ability to control the placement of telecommunications equipment. It is expected that further court and legislative activity will occur on this issue and we will provide further updates when warranted. TENNESSEE AMENDS EMPLOYEE WAGE PAYMENT FREQUENCY MANDATES On May 11, 2017, Tennessee Governor Bill Haslam signed into law House Bill 419 (HB 419) amending the frequency in which employers must pay employee wages. HB 419 became effective on the date the bill was signed (May 11, 2017). Previously, Tennessee law required that all wages or compensation of employees in private employments is due and payable as follows: (1) All wages or compensation earned and unpaid prior to the first day of any month is due and payable not later than the twentieth day of the month following the one in which the wages were earned; and (2) All wages or compensation earned and unpaid prior to the sixteenth day of any month is due and payable not later than the fifth day of the succeeding month. HB 419 amended the previous law as follows: (1) All wages or compensation of employees in private employment is due and payable not less frequently than once per month; 11

12 Tech Flex: June, 2017 Volume VI 12 (2) For each employer that makes wage payments once monthly to employees in private employments, all wages or compensation earned and unpaid prior to the first day of any month is due and payable not later than the fifth day of the succeeding month; and (3) For each employer that makes wage payments in two or more periods per month, all wages and compensation of employees in private employments is due and payable as follows: (A) All wages or compensation earned and unpaid prior to the first day of any month are due and payable not later than the twentieth day of the month following the one in which the wages were earned; and (B) All wages or compensation earned and unpaid prior to the sixteenth day of any month is due and payable not later than the fifth day of the succeeding month. In addition, HB 419 codified that final wages of a terminated employee must include any vacation pay or other compensatory time that is owed according to company policy or a labor agreement. However, employers are not required to provide paid or unpaid vacation leave and are not required to have written vacation pay policies For a copy of HB 419, please click on the link provided below: TEXAS ENACTS LEAVE RIGHTS FOR FOSTER CHILDREN On May 26, 2017, Texas Governor Greg Abbott signed into law House Bill 88 (HB 88) that prohibits an employer from implementing a leave policy that denies an employee the use of leave to care for the employee s foster child. HB 88, effective as September 1, 2017, states as follows: SECTION 1. Subchapter B, Chapter 21, Labor Code, is amended by adding Section to read as follows: Sec DISCRIMINATORY LEAVE POLICY AFFECTING EMPLOYEE'S ENTITLEMENT TO PERSONAL LEAVE TO CARE FOR SICK FOSTER CHILD. An employer commits an unlawful employment practice if: (1) the employer administers a leave policy under which an employee is entitled to personal leave to care for or otherwise assist the employee's sick child; and (2) the leave policy described by Subdivision (1) does not treat in the same manner as an employee's biological or adopted minor child any foster child of the employee who: (A) resides in the same household as the employee; and (B) is under the conservatorship of the Department of Family and Protective Services. 12

13 Tech Flex: June, 2017 Volume VI 13 SECTION 2. Section , Labor Code, as added by this Act, applies only to a claim of discrimination based on conduct that occurs on or after the effective date of this Act. A claim of discrimination that is based on conduct that occurs before the effective date of this Act is governed by the law in effect on the date the conduct occurred, and the former law is continued in effect for that purpose. It is important to note that Texas does not require an employer to provide a company leave policy, only that if a company chooses to do so, such policy must provide leave to care for an employee s foster child. VERMONT MODIFIES CHILD SUPPORT WITHHOLDING ORDER REMITTANCE As a result of the enactment of Senate Bill 69, employers must remit payment of child support withholding for out-of-state orders to the State Disbursement Unit or tribal agency designated on the order, rather than the Vermont Office of Child Support. This modification to state law, effective July 1, 2017, brings Vermont into compliance with the Uniform Interstate Family Support Act (UIFSA), which requires an employer to implement a child support withholding order it receives from another state s child support enforcement agency as long as the order appears to be valid. For a copy of S.B. 69, please paste the following into your browser. s%20enacted.pdf ADDITIONAL VILLAGES/CITIES OPT OUT OF COOK COUNTY MANDATES The following villages/cities have passed ordinances to opt out of the Cook County, Illinois ordinance that provides for a minimum wage increase and paid sick leave for county residents set to be effective July 1, Illinois law allows cities and villages within a county to opt out of laws enacted by counties. Section 6(c) of the Illinois Constitution provides that if a home rule county ordinance conflicts with an ordinance of a municipality, the municipal ordinance shall prevail within its jurisdiction. As a result of the choice to opt out, employers within these villages/cities are only required to comply with federal and Illinois state laws regarding the minimum wage and paid sick leave. Therefore employers within these villages/cities need only pay the Illinois state minimum wage of $8.25 per hour rather than the Cook County minimum wage of $10.00 per hour effective July 1, In addition, employers in these villages/cities do not need to comply with the Cook County paid sick leave ordinance that requires employers to provide their workers with one hour of paid sick time for every 40 hours worked. Justice Hillside Homewood Maywood Morton Grove Niles Northbrook 13

14 Tech Flex: June, 2017 Volume VI 14 Previously the following villages/cities have chosen to opt out of both the minimum wage and paid sick leave the Cook County mandates with the exception of the ones asterisked (*) that opted out of the paid sick leave mandate but adopted the Cook County minimum wage provision. Mount Prospect Elmwood Park Rosemont Tinley Park Barrington Oak Forest River Forest Palos Park Wheeling Rolling Meadows Schaumburg Elk Grove Streamwood Bedford Park* Arlington Heights Palatine Burr Ridge Evergreen Park Hanover Park Hickory Hills Lynnwood Norridge Riverside South Barrington Rolling Meadows Hoffman Estates Bartlett* Buffalo Grove Harwood Heights Oak Lawn Western Springs Summit Palos Heights * Opted out of paid sick leave mandate but adopted the Cook County minimum wage provision. 14

15 Tech Flex: June, 2017 Volume VI 15 CHICAGO ADJUSTS TIPPED EMPLOYEE CASH WAGES It was previously reported that the minimum wage in Chicago, Illinois will increase to $11.00 per hour effective July 1, The city has now announced that the required minimum cash wages for tipped employees will increase to $6.10 per hour on the same date. Currently, the minimum wage in Chicago is $10.50 per hour with the tipped employee minimum cash wage being $5.95 per hour. For a copy of the Chicago minimum age announcement, please paste the following into your browser. umwageupdate.html KANSAS CITY, MO ADOPTS MINIMUM WAGE ORDINANCE The City of Kansas City, MO has adopted Ordinance No establishing a city-wide minimum wage that requires the local minimum wage hourly rates and their effective dates, as shown below. Please Note: The Missouri Legislature has approved legislation that would bar political subdivisions within the state from requiring employers to give employees minimum wages, living wages, or benefits greater than those currently required under state law. Finalized on May 12, H.B is now on the desk of Missouri Governor Eric Greitens. If the bill is enacted, it will become effective on August 28, It is not clear at this point what impact the state prohibition on local minimum wages will have on the Kansas City minimum wage and it is widely expected that the matter will end up in court. Minimum Wage Effective Date Minimum Hourly Rate 09/18/2017 $ /01/2019 $ /01/2020 $ /01/2021 $ /01/2023 $13.00 Note: The Kansas City minimum wage will not apply when it is equal to or less than the MO state minimum wage or the federal minimum wage, whichever is greater. 15

16 Tech Flex: June, 2017 Volume VI 16 Tipped Employees Effective Date Minimum Cash Wage Maximum Tip Credit Minimum Hourly Rate 09/18/2017 $3.85 $4.65 $ /01/2019 $3.85 $5.97 $ /01/2020 $3.85 $7.11 $ /01/2021 $3.85 $8.13 $ /01/2023 $3.85 $9.15 $13.00 Note: The Kansas City ordinance provides that the minimum cash wage for tipped employees is as follows: A Tipped Employee shall be paid a minimum cash wage directly by an Employer of no less than fifty percent (50%) of the Minimum Wage established by the State of Missouri which is currently $7.70 per hour. Missouri increases the state minimum wage annually based on the July-to-July percentage change in the CPI-W, U.S. city average, rounded to nearest 5 cents. Consequently the $3.85 level noted above may be increased at the beginning of each calendar year. Updates will be provided accordingly. Annual Cost of Living Adjustment (COLA) Beginning on January 1, 2024, and each January 1 st thereafter, the minimum hourly wage will be adjusted annually for increases or decreases in the Consumer Price Index (CPI-W) rounded to the nearest five cents ($0.05). Covered Employers Employer includes any individual, partnership, association, corporation, business trust, or any business organization, person or group of persons engaged in providing, selling, purchasing or investing in goods or services within the geographical boundaries of Kansas City and employs a total of more than 15 employees regardless of age and regardless of location. The City of Kansas City and its departments. Employers Exempt from the Ordinance Governmental entities, which includes any other unit of local government, state government or the government of the United States. Covered Employees Full-time, part-time or temporary employees working 20 hours or more in any given calendar year within the geographic boundaries of the City of Kansas City. Employees Exempt from the Ordinance Individuals employed by the United States, the State of Missouri or any of its political subdivisions. 16

17 Tech Flex: June, 2017 Volume VI 17 Individuals voluntarily engaged in the activities of an education, charitable, religious or nonprofit organization where no employer/employee relationship exists. Apprentices in a registered apprentice program recognized by the State of Missouri, or the Federal Bureau of Apprenticeship and Training, as well as any apprentice program offered by Kansas City. Temporary employees of an educational, charitable or religious youth camp or retreat where room and board are provided to the employee, or if a day camp where board only is provided. Any employee that is the parent, spouse, child or other member of the employer s immediate family. Persons working for a business in connection with a court-ordered community service program Student interns participating in a qualified work-study program. Persons 17 years of age or younger LONG BEACH, CA INCREASES MINIMUM WAGE FOR HOTEL WORKERS The city of Long Beach, California has announced that the minimum wage rate for hotel workers will increase from $14.07 per hour to $14.35 per hour, effective July 1, "Hotel worker" means any individual (1) whose primary place of employment is at one or more hotels and (2) who is employed directly by the hotel employer or by a person who has contracted with the hotel employer to provide services at the hotel. California does not allow employer to take a tip credit when paying employees who may receive tips. The minimum wage in Long Beach for employees not classified as a hotel worker is $10.50 for employers with 26 or more employees and $10.00 for employers with 25 or fewer employees. Those rates will increase on January 1, 2018 to $11.00 and $10.50 respectively. For a copy of the Long Beach announcement, please click on the link below. 17

18 Tech Flex: June, 2017 Volume VI 18 NEW YORK CITY PASSES SERIES OF FAIR WORK WEEK LAWS On May 30, 2017, New York City mayor Bill DeBlasio signed several measures into law that afford new workplace protections to certain fast food workers. The series of laws includes four separate provisions. The first law applies to non-salaried fast food employees and creates requirements around employee schedules. Specifically, the law requires that when a new fast food employee receives his or her first work schedule, a fast food employer must provide a written good faith estimate setting out the number of hours the employee can expect to work per week for the duration of the employee s employment, along with the expected dates, times and locations of those hours. If a long-term or indefinite change is made to the estimate, the employer must provide an updated good faith estimate to the affected employee as soon as possible and before he or she receives the first work schedule following the change. The first law also mandates that employers provide fast food employees with their work schedules at least 14 days in advance. If changes to the schedule are made within that period, employers are required to pay affected employees a premium of between $10 and $75. The premiums are set out below: Description of Change Less than 14 days notice but at least 7 days notice: (a) Additional hours or shifts are added; or (b) The date or start or end time of a regular shift or on-call shift is changed with no loss of hours. Less than 14 days notice but at least 7 days notice: (a) Hours are subtracted from a regular or on-call shift; or (b) A regular or on-call shift is cancelled. Less than 7 days notice: (a) Additional hours or shifts are added; or (b) The date or start or end time of a regular or on-call shift is changed with no loss of hours. Less than 7 days but at least 24 hours notice: (a) Hours are subtracted from a regular or on-call shift; or (b) A regular or on-call shift is cancelled. Less than 24 hours notice: (a) Hours are subtracted from a regular or on-call shift; or (b) A regular or on-call shift is cancelled. Premium Amount Payable $10 $20 $15 $45 $75 This scheduling law, which also includes notice and posting provisions, takes effect 180 days after it was signed on May 30, 2017 (which is November 26, 2017), provided that 18

19 Tech Flex: June, 2017 Volume VI 19 appropriate regulations have been promulgated, and with certain exceptions for unionized employees. The first law can be found at: 7D A083-65BD4E355E55&Options=ID Text &Search=fair+work+week The second law prohibits fast food employers from scheduling employees to work shifts with less than 11 hours between them. If an employer requests that an employee take a shift less than 11 hours after the last shift they worked, and the employee consents to do so, the employer must pay that person $100. This measure is effective 180 days after it was signed on May 30, 2017 (November 26, 2017), provided that appropriate regulations have been promulgated. The second law can be found at: 7D A083-65BD4E355E55&Options=ID Text &Search=fair+work+week. The third law requires fast food employers with available hours to offer shifts to existing employees before hiring new employees. It is intended to provide part-time fast food workers with a path toward additional hours and full-time employment, should they want it. Employers must offer hours to current employees up until the point at which the employer would be required to pay overtime, or until all current employees have rejected available hours, whichever comes first. Only after the employer has exhausted options to provide shifts to current workers can the employer hire additional part-time workers. This measure is effective 180 days after it was signed on May 30, 2017 (November 26, 2017), provided that appropriate regulations have been promulgated. The third law can be found at: D5-9EA4-75A6B5B46B12&Options=&Search. The fourth law fast food employees the ability to make voluntary contributions to not-forprofit organizations of their choice through payroll deductions. It takes effect 180 days after it was signed (November 26, 2017). Unlike the other provisions, this law provides that it expires and is deemed repealed 2 years after its effective date. The fourth law can be found at: SAN FRANCISCO PROVIDES GUIDANCE ON PAID PARENTAL LEAVE San Francisco has published guidance in the form of frequently asked questions (FAQs) in relation to its Paid Parental Leave Ordinance (Ordinance). By way of background, the Ordinance requires employers with a certain number of employees to pay the difference between new parents wages and benefits paid under California s Paid Family Leave Program for 6 weeks. The law became effective on January 1, 2017 for employers with 50 or more employees; July 1, 2017 for employers with 35 or more employees; and January 1, 2018 for employers with 20 or more employees. It provides supplemental compensation to employees receiving California Paid Family Leave (PFL) benefits to bond with a new child. Specifically, under the Ordinance, employers are required to provide employees receiving state PFL benefits with supplemental compensation equal to the difference between the employee s PFL benefit amount and the employee s normal gross weekly wages such that the employee receives up to 100% of his or her weekly wages, subject to a weekly maximum benefit amount, for up to 6 weeks. 19

20 Tech Flex: June, 2017 Volume VI 20 The new FAQs, among other things, clarify that: To receive the benefits prescribed by Ordinance, employees must apply for both California PFL and San Francisco Ordinance benefits. In addition, employees must have: commenced work for a covered employer at least 180 days before the start of the PFL payment period; worked at least 8 hours per week for the covered employer; and worked in San Francisco at least 40% of his or her weekly hours for the covered employer. The threshold number of employees that triggers the requirements of the Ordinance for employers includes employees working or located outside of San Francisco. Seasonal, temporary, part-time and contracted employees are also counted toward the threshold number. For employers whose workforces fluctuate from week to week, the Ordinance provides a look-back formula for calculating their workforces. An employer is not required to pay supplemental compensation while the employee is serving his or her waiting period for California PFL, but only for the 6 weeks that the employee receives the PFL benefits. An employer may, if it wishes, apply up to two weeks of an employee s accrued and unused PTO or vacation time to cover the cost of the required supplemental compensation, but it may not apply the employee s accrued and unused sick time for this purpose. With respect to the former scenario, employee agreement is required; however, an employee working for an employer with 10 or more employees must allow the employer to apply accrued PTO or vacation in excess of 72 hours. For a copy of the FAQs and Ordinance, please click on the following link. 20

21 Tech Flex: June, 2017 Volume VI 21 JULY 1, 2017 MINIMUM WAGE INCREASES The following are a list of cities, counties and states where the minimum wage will increase as of July 1, Jurisdiction July 1, 2017 Minimum Wage Per Hour Flagstaff, Arizona $10.50 (currently $10.00). Tipped employees must be paid at least $7.50 (currently $7.00) in cash wages. Emeryville, California Long Beach, California Los Angeles, California Los Angeles County, California Malibu, California Milpitas, California Pasadena, California San Francisco, California San Jose, California Small Businesses (55 or fewer Employee) $14.00 (currently $13.00). Large Businesses (56 or more Employees) $15.20 (currently $14.82). Tipped Credit not allowed in California. HOTEL WORKERS: $14.35 (currently $14.07). Tipped Credit not allowed in California. The minimum wage in Long Beach for employees not classified as a hotel worker is $10.50 for employers with 26 or more employees and $10.00 for employers with 25 or fewer employees. Those rates will increase on January 1, 2018 to $11.00 and $10.50 respectively. $12.00 (currently $10.50). Tipped Credit not allowed in California. $12.00 (currently $10.50). Tipped Credit not allowed in California. $12.00 (currently $10.50). Tipped Credit not allowed in California. $11.00 (currently $10.50). Tipped Credit not allowed in California. $12.00 (currently $10.50). Tipped Credit not allowed in California. Tipped Credit not allowed in California. $14.00 (currently $13.00). Tipped Credit not allowed in California. $12.00 (currently $10.50). Tipped Credit not allowed in California. 21

22 Tech Flex: June, 2017 Volume VI 22 Jurisdiction San Leandro, California Santa Monica, California July 1, 2017 Minimum Wage Per Hour $12.00 (currently $10.50). Tipped Credit not allowed in California $12.00 (currently $10.50). Tipped Credit not allowed in California. District of Columbia $12.50 (currently $11.50). Tipped employees must be paid at least $3.33 (currently $2.77) in cash wages. Chicago, Illinois $11.00 (currently $10.50). Tipped employees must be paid at least $6.10 (currently $5.95) in cash wages. Cook County, Illinois $10.00 (currently $8.25). Tipped employees must be paid at least $4.95 (currently $3.13) in cash wages Maryland $9.25 (currently $8.75). Tipped employees must be paid at least $3.63 (currently $3.63) in cash wages. Montgomery County, Maryland $11.50 (currently $10.75). Tipped employees must be paid at least $4.00 (currently $4.00) in cash wages. Oregon Portland, Oregon Urban Growth Boundary Oregon Non-Urban Counties $10.25 (currently $9.75). Tipped Credit not allowed in Oregon. $11.25 (currently $9.75). Tipped Credit not allowed in Oregon. $10.00 (currently $9.50). Tipped Credit not allowed in Oregon ADP does not make any representation or warranty that the information contained in this newsletter, when used in a specific and actual situation, meets applicable legal requirements. This newsletter is provided solely as a courtesy and should not be construed as legal advice. The information in this newsletter represents informational highlights and should not be considered a comprehensive review of legal and compliance activity. Your legal counsel should be consulted for updates on law and guidance that may have an impact on your organization and the specific facts related to your business. **Please note that the information provided in this document is current as of the date it is originally published.** 22