Although the federal government shutdown has dominated the headlines after the calendar flipped to 2019, employers should review their policies and procedures to ensure that they are complying with any new federal, state and local laws have taken effect or will take effect in 2019 . We have summarized below some of the new laws, beyond required increases in the minimum wage in many jurisdictions, that are likely to have a significant impact moving forward.
In response to the growing public sentiment favoring additional workplace protections for employees who are nursing, California, Illinois and New York City recently enacted legislation expanding the existing lactation accommodation requirements in those jurisdictions in 2019.
California law previously required employers to provide a private location for lactation, other than a toilet stall, that was in close proximity to the employee's work area. Effective January 1, 2019, Assembly Bill ("AB") 1976 amends California's lactation accommodation requirements to conform with federal law by requiring employers to offer an area or room for lactation other than a bathroom. Employers that cannot provide a "permanent lactation location" because of "operational, financial, or space limitations" may instead make a "temporary lactation location" available so long as the space is "private and free from intrusion while an employee expresses milk," is used "only for lactation purposes while an employee expresses milk," is not a bathroom and is in close proximity to the employee's work area. AB 1976 includes an undue hardship exemption that is evaluated by the California Department of Industrial Relations based on the employer's size, nature and structure.
Illinois recently amended its Illinois Nursing Mothers in the Workplace Act, effective August 21, 2018, to require Illinois employers to provide paid breaks to nursing employees who need to express milk at work. While the required break time for expressing milk may run concurrently with regularly scheduled break time, the employer may not reduce an employee's compensation for time spent expressing milk or nursing. In addition, Illinois employers must provide "reasonable" break time for nursing employees for up to one year after the birth of the child. The amended Illinois law also incorporates the "undue hardship" exemption found in the Illinois Human Rights Act.
New York City
New York City recently enacted two lactation accommodation laws, effective March 18, 2019. Collectively, the laws (i) establish minimum requirements for workplace lactation rooms, (ii) mandate that employers develop and provide employees notice of a written lactation room policy and (iii) require that lactation rooms be made available to employees upon request. Specifically, the laws require employers in New York City with at least four employees to provide nursing employees with a lactation room and a refrigerator suitable for breast milk storage that are in reasonable proximity to the employee's work area. The new laws also establish specific requirements for the lactation room, including that it must not be a bathroom and must include an outlet, a chair, a surface on which to place a breast pump and access to running water. The new lactation laws also include an undue hardship exemption but require employers and employees to engage in cooperative dialogue to determine whether there is another suitable accommodation for nursing employees.
California Laws Governing Harassment Training, Confidentiality Provisions in Settlement Agreements Relating to Sexual Harassment, and Pre-Employment Salary Inquiries
In 2018, California enacted a number of new laws inspired by the #MeToo movement that promote gender diversity and equality and target sexual and other forms of harassment in the workplace. We previously reported on many of these new laws. In addition to the highly publicized SB 826, which requires publicly traded companies with their principal executive office in California to have at least one female director by the end of 2019, below are some of the other key legislative developments in California for 2019.
Expanded Harassment Training Requirements
In September 2018, California enacted SB 1343, which significantly expands the scope of California's sexual harassment training requirements. While California law previously only required supervisors in companies with 50 or more employees to receive anti-harassment training once every two years, SB 1343 expanded the mandatory training requirements. Specifically, SB 1343 requires that by January 1, 2020, all California employers with five or more employees provide at least two hours of sexual harassment prevention training to supervisors and at least one hour of training to all other employees every two years. Employers must also provide the training to new employees within six months of hire.
Confidentiality Clauses in Settlement Agreements
In September 2018, California also enacted SB 820, which prohibits California employers from including in any settlement agreement relating to allegations of sexual harassment, assault or discrimination a confidentiality provision that prevents the employee from disclosing the underlying factual circumstances or conduct. Effective January 1, 2019, SB 820 expressly voids any provision that prohibits the disclosure of any such facts, including allegations of retaliation for reporting sexual harassment or discrimination. The new law, however, does not prohibit parties from agreeing to keep the settlement amount confidential and allows settlement agreements to include provisions protecting the claimant's identity if the claimant has requested anonymity.
Amendments to Legislation Regarding Salary History Inquiries
In 2017, California passed broad legislation banning pre-employment inquiries about salary history and also requiring employers to provide pay scales to any applicant upon request. In an effort to clarify certain ambiguities in the law, California recently enacted AB 2282. Effective January 1, 2019, AB 2282 amends the California Labor Code to clarify that (i) employers may ask applicants about their salary expectations for the position they are seeking, (ii) only external applicants are entitled to receive a "pay scale" upon request and only after they have completed an initial interview and (iii) the pay scale need only include a salary or hourly wage range. AB 2282 also provides that compensation decisions for a current employee may be based on his or her existing salary if doing so is justified by factors such as seniority or a merit system.
New York City's Stop Sexual Harassment in NYC Act
In May 2018, New York City Mayor Bill de Blasio signed into law the Stop Sexual Harassment in NYC Act, a comprehensive bill aimed at addressing and preventing sexual harassment in the workplace. As we previously reported, the Act expands the New York City Human Rights Law to cover allemployers, regardless of the number of employees, for purposes of sexual harassment claims. In addition, starting April 1, 2019, New York City employers with at least 15 employees will be required to conduct mandatory "interactive" sexual harassment training annually for all employees who work at least 80 hours in a calendar year and are employed for at least 90 days. Employers must also maintain records of their compliance with the law, including signed employee acknowledgements. The New York City Commission on Human Rights is currently developing an online training program for employers that should be available on the commission's website on or before April 1, 2019.
Illinois' New Employee Expense Reimbursement Law
Effective January 1, 2019, Illinois has joined a number of states, including California, Massachusetts, New York, Iowa and Washington DC, in requiring employers to reimburse employees for employment-related expenses.
Specifically, Illinois amended the Wage Payment and Collection Act (820 ILCS 115/9.5) to include a requirement that employers reimburse employees for all "necessary expenditures . . . incurred by the employee within the employee's scope of employment and directly related to services performed by the employer." The law defines "necessary expenditures" to mean "all reasonable expenditures . . . required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer."
The law requires employees to submit any necessary expenditures to their employers along with "appropriate supporting documentation" within 30 calendar days after incurring the expense, unless the employer provides additional time for submitting reimbursement requests in a written expense reimbursement policy. In the event the supporting documentation is "nonexistent, missing, or lost," the employee may submit a signed statement regarding the expenses.
The law also provides that an employee need not reimburse an employee for expenses if the employer has an established written expense reimbursement policy with which the employee failed to comply. Furthermore, the employer is not required to reimburse an employee to the extent the expenditure amount exceeds the employer's specifications or guidelines for expenses in a written expense reimbursement policy, as long as the policy does not provide for no reimbursement at all or for "de minimis" reimbursement. Employers in Illinois should ensure that they reimburse employees for necessary employment-related expenditures and that they have written expense reimbursement policies setting forth the reimbursement guidelines and specifications.
Restrictions on Deductions for Sexual Harassment Settlements Impact 2018 Tax Returns
The federal Tax Cuts and Jobs Act, which was enacted in December 2017, made significant changes to the tax code that employers must take into account when preparing their 2018 tax returns in the coming months. Among these, the law amended Internal Revenue Code section 162, which allows employers to deduct certain business expenses. In relevant part, the law eliminated the deduction in circumstances where an employer requires an employee to sign a nondisclosure agreement to resolve his or her sexual harassment or abuse claims. Starting with the 2018 tax year, therefore, employers are no longer permitted to deduct settlement payments as business expenses if the employee signed such an agreement. Employers will need to remember this requirement as they prepare and file their 2018 tax returns over the next few months.
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.