Employers already managing through coronavirus-inspired guidelines will face many new state employment laws starting July 1—most of them not related to Covid-19.
The midyear mark routinely serves as the effective date for a long list of state and local laws. While the Covid-19 pandemic restricted state legislative activities this spring, businesses still will see a number of new requirements ranging from an employee scheduling ordinance in Chicago to a ban on forced microchip implants in Indiana.
Virginia employers, in particular, must manage through an avalanche of new laws, after a newly elected Democratic majority pushed through a full agenda of state legislation in January and February, before states began locking down in response to the novel coronavirus.
“Employers have been busy, right? They’ve been busy trying to take care of their workforce and their clients” in the midst of the pandemic, said Virginia-based labor and employment attorney Faith Alejandro, of the firm Sands Anderson. “Now they’re thinking about this new package of laws from the General Assembly that will really change the legal landscape.”
Anti-Bias, Wage Theft, Noncompetes
Starting Wednesday, employers in Virginia will face broader requirements and the potential for worker lawsuits related to workplace discrimination, wage payment violations, non-competition agreements, and worker classification.
Virginia became an outlier among Southern states this year by specifically barring discrimination based on sexual orientation and gender identity in SB 868, which also added pregnancy, childbirth, age, and veteran status as protected classes in the state’s anti-bias law. The bill also made it easier to sue employers for discrimination and lifted the cap on damages.
In related legislation, the state banned discrimination related to hairstyles and textures historically associated with race (HB 1514), required expanded workplace accommodations for pregnancy and lactation (HB 827), and extended anti-bias protections to participants in state-registered apprenticeship programs (HB 1252). The state also granted cities and counties the power to adopt their own local anti-bias ordinances covering sexual orientation and gender identity (HB 696).
Virginia also took on worker classification, creating a presumption that workers are employees unless the employer can prove otherwise using the classification guidelines provided by the Internal Revenue Service. The classification bills taking effect Wednesday include one to create a private right of action for worker misclassification (SB 894) and a ban on retaliation against workers who complain of misclassification (HB 1199).
The wave of laws also includes a ban on non-compete agreements for workers earning less than the state’s average wage (SB 480) and protections against retaliation for workplace whistleblowers (HB 798).
Lawmakers also passed a package of wage theft measures, which include creating a private right of action for wage violations while also enabling class actions (HB 123), giving the state labor commissioner broader powers to investigate wage complaints (HB 336), and barring retaliation against workers who complain of wage violations (HB 337).
Large employers tend to already comply with most of the new requirements related to discrimination, pregnancy accommodations, and other areas, Alejandro said, but added compliance is tougher for small employers without robust human resources departments. She also predicted the new laws could bring more lawsuits against employers.
“I expect to see more litigation in Virginia courts,” she said. “I imagine a lot of Virginia judges will be dusting off their labor and employment law books.”
Chicago, NJ, Iowa
Elsewhere, employers are preparing for new state and local requirements that take effect Wednesday, such as Chicago’s employee scheduling or “fair workweek” ordinance.
The Chicago ordinance requires certain employers to give hourly workers at least 10-days notice of their work schedules and limits their ability to make schedule changes or require employees to work overtime. Chicago employers also face revisions to the city’s paid sick leave ordinance effective July 1, expanding it to cover outside sales representatives, motor carriers, members of religious organizations, and student workers at Illinois colleges and universities.
On top of those changes, Chicago is among the cities and states where employers face minimum wage increases on Wednesday. For Chicago employers with more than 20 employees, the minimum hourly rate rises to $14, as the statewide minimum wage for Illinois rises to $10 an hour.
In New York, a statewide law taking effect June 30 penalizes call-center businesses for outsourcing jobs to foreign call centers by requiring them to repay any state incentives such as grants or loan guarantees and blocking them from receiving future benefits for five years.
A similar New Jersey law to restrict outsourcing of call center jobs takes effect July 1.
New Jersey employers will get a temporary reprieve from a new severance pay law that originally was due to take effect in mid-July, after lawmakers and Gov. Phil Murphy (D) agreed to delay its effective date for 90 days in light of the economic effects of the Covid-19 pandemic. That law will require companies to provide severance pay to workers affected by a mass layoff or business shutdown and to give at least 90-days notice of the planned layoff. It makes New Jersey the first state in the nation to require severance pay in the event of layoffs and faced vocal opposition from business and industry groups.
Rather than making significant changes, some new state laws appear more targeted at protecting the status quo.
In Iowa, for example, a law taking effect Wednesday will ensure truck drivers who own their rigs can be classified as independent contractors—a common business model in the trucking industry. The new law was the Republican-majority legislature’s response to blue state efforts, such as California’s 2019 law A.B. 5, that aim to classify truck drivers and thousands of other workers as employees.
And in Indiana, a law effective Wednesday bars employers from requiring workers to implant microchip or RFID device in their bodies, part of a preemptive strike against forced microchipping that isn’t known to exist among U.S. employers.