With the start of the new year, here’s an impactnews primer on five HR issues and topics that likely will loom large in 2016: the Affordable Care Act; marijuana and the workplace; proposed changes to overtime under the Fair Labor Standards Act; state and city minimum wage increases; and the latest news around paid sick leave policy proposals.
Health Care Reform
Beginning this new year, all mid-size and large employers are required to conduct Section 6056 reporting under the Affordable Care Act’s Employer Mandate. As noted in our October 2015 impactnews, copies of these forms were to be provided to employees before February 1 and filed with the IRS before February 29 (paper) or by March 31 (electronic).
*Important note: just late last month (Dec. 28), however, the IRS granted an extension of two months for the forms distribution to employees (now March 31) and an extension of three months for the filing with the IRS (now May 31 if filing by paper and June 30 if filing electronically).
In related ACA news, employer mandate penalties will now apply to employers with 50-99 full-time equivalent employees. It also increases the percentage of full-time employees to whom covered employers must offer coverage (from 70% to 95%) and decreases the number of full-time employees that can be subtracted from the penalty calculation (from 80 to 30).
Marijuana and the Workplace
Brief update on marijuana use and the workplace: currently, 23 states and the District of Columbia (DC) have decriminalized marijuana for medicinal use (while Alaska, Colorado, Oregon, Washington and DC have legalized recreational use). The sale and use of marijuana, however, remains illegal under federal law.
To be sure, the current discrepancies between state and federal law have implications for employers. In most states, an employer can terminate employment for on-duty and off-duty employee marijuana use even if the employee has a medical marijuana card. Because the drug is still illegal to use, possess and sell under federal law, employers are not required to make accommodations for use under the Americans with Disabilities Act.
Some states, however, have anti-discrimination language written into their medical marijuana statutes that may require employers to accommodate the presence of some amount of marijuana in an employee’s system while that employee is on duty. As it stands, there’s little doubt this complex policy and legal landscape will evolve in the year ahead.
Proposed Changes to the Fair Labor Standards Act
For the Obama administration’s recently proposed rule changing eligibility for overtime pay, the public comment period (which ended last September) saw more than 250,000 comment submissions. With the comment period over, the administration can proceed to implement the rule without Congressional action.
Under the proposed rule within the Fair Labor Standards Act (FLSA), salaried workers making up to $50,400 would be eligible for overtime pay – up from the current level of $23,660. In addition, beyond this initial large jump, the rules propose an automatic annual adjustment to both the white collar salary level and the highly compensated employee compensation rate. These would be tied either to a cost of living index or to a set percentile of earnings across all salaried workers.
Just late last month, the U.S. Department of Labor announced it is targeting July 2016 – several months ahead of the presidential election date – for release of its final rule. This date, though, still could be delayed until late 2016 or even into 2017. Employers would have 60 days from that release date to comply.
Learn more here about key steps you can take to prepare for release of the new regulation by conducting a FLSA audit of your employees’ exempt/non-exempt status to ensure you’re in full compliance.
Minimum Wage Increases
Beginning this month, minimum wage increases take place in 14 states: Alaska, Arkansas, California, Colorado, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, New York, Rhode Island, South Dakota, Vermont and West Virginia. Minimum wage increases in D.C., Maryland and Minnesota will occur by this summer.
While the current federal minimum wage is $7.25/hour (29 states have wage rates higher than the federal level), Washington, DC will raise its minimum wage to $15/hour by 2020, along with Los Angeles by 2020, San Francisco by 2018, and Seattle by 2017 for businesses with at least 500 U.S. employees and by 2021 for others. In New York City, by comparison, fast food workers at chains with at least 30 locations will receive a minimum wage of $15 (by 2018) and the state of New York will have its own $15 minimum wage for fast food workers (by 2021).
Paid Sick Leave Trends
With the start of the new year, Oregon joins Connecticut, California, and Massachusetts in implementing its own paid sick leave law. While there currently is no federal law requiring private-sector employers to provide paid sick leave to their employees, only a handful of municipalities require private-sector employers to provide paid sick leave. Across these states and cities, the details of these laws differ. For example, the amount of time for sick leave varies (24 hours or three days in California to 40 hours in Massachusetts and Oregon to 72 hours in several municipalities in California).
In Massachusetts and Oregon, small employers can offer unpaid leave instead of paid time, while in California, employers of any size must offer paid leave.
In addition, as reported in last September’s impactnews, President Obama signed an Executive Order giving all employees working on federal contracts the ability to accrue up to seven days of paid sick leave each year. The order, which begins with new contracts issued in 2017, affects roughly 300,000 workers, each of whom will earn one hour of paid sick leave for every 30 hours worked.
Summary
As these topics continue to develop and evolve through 2016, stay in touch with us at impactHR so you’re on top on these issues plus related trends, policies, tips and best practices in human resources today. Let us know how we can help you navigate the complex changes taking place in HR today while staying in compliance with relevant laws and regulations.
impactHR’s Kelly Mitchell Serves on Leadership Committee to Select Baltimore’s SmartCEO Future 50 Award Winners
Kelly Mitchell, Principal, impactHR
Kelly Mitchell, founder and principal at impactHR, LLC, recently completed service as one of four independent business and community leaders who evaluated and selected the winning companies for SmartCEO’s Baltimore 2016 Future 50 Awards.
SmartCEO’s Future 50 Awards program annually recognizes 50 of the Baltimore region’s fastest growing, mid-sized companies, representing the future employment growth and overall strength of the Baltimore region’s economy. As part of this year’s program, select companies in large “Blue Chip” and small “Emerging Growth” categories are also recognized.
The 50 winning companies, all listed alphabetically and not ranked, were chosen based on a three-year average of employee and revenue growth. The 2016 winning companies, covered in the January-February 2016 issue of SmartCEO Baltimore magazine, will be honored at the SmartCEO Future 50 awards gala, Thursday, January 21 at the Hunt Valley Inn.
impactHR’s Mitchell, along with the three other independent leaders from Greater Baltimore, evaluated all nominations based on the Future 50 selection criteria and were responsible for making the final 50 winning selections. The other three committee members are: Ash Shukla, owner of Financial CHAKRAS; Jonathan Balog, Vice President of Marketing and Communications, Goodwill Industries of the Cheseapeake; and Susan Eng with USI Insurance Services. Learn more
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