COVID-19 and your business. Get up-to-date HR and tax information
Several cities and states have new HR and payroll laws that take effect July 1,  2020. See which ones affect your small business.
  1. OnPay
  2. HR Software
  3. Small Business HR Guide
  4. July 2020 employment law changes

New employment laws take effect July 1, 2020: What employers need to know

Updated: June 30, 2020 

 

Seems like July is the new January when it comes to rolling out employment laws, because many new and updated laws and regulations are going live this summer. Some expand upon or amend previous regulations and others create substantial new penalties if a business falls out of compliance. We’ve listed all the July 1, 2020 changes to payroll and HR laws by state below (plus some federal updates), so you can quickly find the ones that apply to your business. We’ve also included a few that go into effect later this summer so you can get ready now.

 

Remember, a whole host of new minimum wage laws also went into effect on July 1.

 

 

Federal

Law Summary Effective date 
Employee Benefits Security Administration Final Rule The final rule establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media to provide covered documents to covered individuals — rather than sending paper documents through the mail. The law allows two optional methods for electronic delivery:

 

  • Website Posting
  • Email Delivery
July 27, 2020
Wage and Hour Division Final Rule Allows employers to pay bonuses or other incentive-based pay to salaried, non-exempt employees whose hours vary from week to week. The final rule clarifies that payments in addition to the fixed salary are compatible with the use of the fluctuating workweek method under the Fair Labor Standards Act (FLSA). August 27, 2020

 

States

This July, there are notable employment law changes in eight states: California, Colorado, Illinois, Iowa, New Jersey, Oregon, Virginia, and Washington, DC. If you live in a different state, it’s possible there are additional laws or regulations that have been updated, so you may want to check with an employment law expert if you have any questions.

 

California

Law Summary Effective date
Expansion of Paid Family Leave benefits Paid Family Leave benefits are extended to a maximum of eight (8) weeks. Employees are eligible for these benefits from California’s state disability insurance (SDI) program:

 

  • To care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner.
  • To bond with a minor child within one year of the birth or placement of the child through foster care or adoption.
July 1, 2020

 

Colorado

Law Summary Effective date 
Colorado Overtime and Minimum Pay and Standards Order #36 Rules The Colorado Department of Labor and Employment (CDLE) will raise the overtime exempt employee minimum salary threshold to $35,568.

 

Exemptions include:

 

  1. nonprofit employers with annual total gross revenue of under $50 million
  2. for-profit employers with annual total gross revenue of under $1 million
July 15, 2020

 

Illinois

Law Summary Effective date 
Illinois Workplace Transparency Law  The original law went into effect on January 1, 2020, and it prohibits any “contract, agreement, clause, covenant, waiver or other documents” from restricting an employee from reporting allegations of unlawful conduct to federal, state, or local officials for investigation. In other words, employers may not compel an employee to keep silent about alleged unlawful employment practices in the workplace.

 

Beginning July 1, 2020, and every July 1 after that, employers that have had at least one (1) adverse judgment or ruling against it in the preceding calendar year must disclose it to the Illinois Department of Human Rights including the total number of final, non-appealable judgments or final, non-appealable administrative rulings entered against the employer in which there was a finding of sexual harassment or unlawful discrimination.

July 1, 2020
Illinois Hotel and Casino Safety Act  The Act requires that downstate hotel and casino employers provide employees working alone in guest rooms, restrooms, or the casino floor with panic buttons that summon help to the employee’s location when the employee “reasonably believes that an ongoing crime, sexual harassment, sexual assault, or other emergency is occurring in the employee’s presence.” These devices must be provided to the employees at no cost.

 

The Act also requires hotels and casinos to create and implement a written sexual harassment policy to protect the employees against sexual assault and sexual harassment by guests.

July 1, 2020
Chicago Fair Workweek Ordinance — Predictive Scheduling Predictive scheduling is giving advance notice of schedules to employees. It’s designed to eliminate “on-call” scheduling, posting and changing schedules without advance notice, or scheduling back-to-back closing and opening shifts.

 

Chicago’s Fair Workweek Ordinance requires employers to post schedules 10 days in advance for employees paid less than $26/hour or $50,000/year.

 

The law applies to businesses in building services, healthcare, hotels, manufacturing, restaurants, retail, and warehouse services AND with at least 100 employees. Nonprofit organizations with more than 250 employees are required to comply and restaurants with at least 30 locations and 250 employees are covered by the law.

 

Covered employees must be given:

 

  • Advance notice of work schedule (10 days)
  • The right to decline previously unscheduled hours
  • 1 hour of Predictability Pay for any shift change within 10 days
  • The right to rest by declining work hours less than 10 hours after the end of the previous day’s shift. If they do work a shift that starts less than 10 hours from their last one, employees must be paid 1.25 times their regular pay rate

Note: the Chicago City Council passed an anti-retaliation ordinance that prohibits adverse actions against employees unable to work for reasons due to COVID-19.

July 1, 2020
Chicago Paid Sick Leave Ordinance The Paid Sick Leave ordinance mandates that all Chicago businesses provide paid sick leave to employees. Any employee who works at least 80 hours for an employer in Chicago within any 120-day period is covered by the ordinance and is eligible for paid sick leave. Employees begin to accrue paid sick leave on the first calendar day after they begin their employment. For every 40 hours worked, employees accrue one (1) hour of paid sick leave.

 

Employees can use the Paid Sick Leave they’ve earned when they or a family member is sick, injured, receiving medical care, or is a victim of domestic violence or a sex offense. They can also use Paid Sick Leave when their place of work has been ordered to close due to a public health emergency, or they need to care for a child whose school has been ordered to close due to a public health emergency.

 

Applies to all employers with at least one covered employee, whether or not the employer has a Chicago worksite.

 

Hours worked outside Chicago do not count towards the accrual of Paid Sick Leave.

 

Note: An employee who receives a salary and is exempt from overtime accrues one hour of Paid Sick Leave for each week of employment unless the salaried position is for an amount different from 40 hours worked per week, in which case the rate of accrual shall be 1 hour for every 40 hours of salaried work. 

 

Employers should keep track of hours worked by non-salaried employees in order to ensure proper accrual.

 

  • Employers may satisfy the workplace posting requirement through their usual methods of communication for such notices, whether by physical posting (measuring 11×17 inches) or electronic notice (via email or other internal communication).
  • Employers may also satisfy the individual notice requirement on employees’ first paycheck with either physical or electronic notice (if the employee receives a direct deposit).
  • Employers of employees that are now covered employees effective July 1 must provide those individuals with the paid sick leave notice along with their first paycheck subject to the PSLO.
  • All notices must be provided in English and any language(s) spoken by employees at the facility who are not proficient in English and in which the Department has made a notice available (as of now, only Spanish).

Records related to paid sick leave usage, rates of pay, hours worked and wage deductions must be kept for at least five (5) years, and made available for inspection upon request by the Department of Business Affairs and Consumer Protection.

 

Employers with tipped and non-tipped employees must identify whether an employee is tipped, non-tipped, or performs duties of tipped and non-tipped positions in their records.

July 1, 2020

 

Iowa

Law Summary Effective date
Waterloo, Iowa: Ban the Box Ordinance Covered employers may not inquire about an applicant’s criminal records prior to issuing a conditional offer of employment, unless criminal history is voluntarily disclosed by the applicant before an offer.

 

Employers also are prohibited from making any employment decision based on:

 

  • arrests or pending criminal charges; and
  • convictions that have been erased, expunged, pardoned, or nullified.

In addition, an employer may only rescind a conditional offer of employment based on a criminal record if they have a legitimate business reason which, according to the ordinance, means:

 

  • Situations where the nature of the criminal conduct has a direct and substantial bearing on the fitness or ability to perform the duties or responsibilities of the position.
  • Situations where the granting of employment would involve unreasonable risk of substantial harm to property or to safety of individuals or the public, to business reputation, or business assets.
  • Positions working with children, developmentally disabled persons, and vulnerable adults where the applicant has a conviction record of a crime against children or disabled or vulnerable adults, including but not limited to crimes of rape, sexual abuse, incest, prostitution, pimping, pandering, assault, domestic violence, kidnapping, financial exploitation, neglect, abandonment, and child endangerment.
  • Situations where an employer must comply with any federal or state law or regulation pertaining to background checks and the criminal conduct is relevant to the applicant’s fitness for the job.
July 1, 2020

 

New Jersey

Law Summary Effective date
Expansion of Insurance Benefits: New Jersey Family Leave Insurance (NJFLI) Paid leave benefits increase to 12 weeks for consecutive leave within a 12-month period. For intermittent leave, state insurance benefits will increase from 42 to 56 days in a 12-month period. The cap on the weekly benefit amount has been raised to 85% (up from 66.6%) with a weekly maximum benefit of $859.00 per week in 2020.

 

Employees who are covered by family leave insurance can apply for benefits to:

 

  • bond with a child within 12 months of the child’s birth or placement by adoption or foster care. The applicant, or the applicant’s spouse or domestic or civil union partner, must be the child’s biological, adoptive, or foster parent — unless a surrogate carried the child.
  • care for a family member with a serious health condition. Supporting documentation from a health care provider is mandatory.
  • care for a victim of domestic violence or a sexually violent offense or for a victim’s family member.
  • “Family member” means a child, parent, parent-in-law, sibling, grandparent, grandchild, spouse, domestic partner, civil union partner, and any other person related by blood to the employee or with whom the employee has a close association that is the equivalent of a family relationship.
  • “Child” means a biological, adopted, or foster child, stepchild or legal ward of a parent. A child gained by way of a valid written contract between the parent and a surrogate (gestational carrier) is included in this definition.

Additional updates:

 

  • Employees taking NJ SAFE Leave Act are eligible for NJFLI benefits.
  • The seven-day waiting period has been eliminated.
  • Employees now have to provide only 15 days of advance notice when requesting intermittent bonding leave. Employees must continue to provide 30 days of advance notice for continuous bonding leave.
  • Employers may not refuse to restore an employee to the same or like position after a period of leave.
  • Employees have multiple remedies in cases of retaliation.
  • The law now includes an anti-retaliation provision prohibiting employers from terminating or harassing a worker because they requested or took leave.
July 1, 2020

 

Oregon

Law Summary Effective date 
Oregon Predictive Scheduling The law requires employers to provide written work schedules at least 14 days in advance. The law also requires employers to provide a good faith estimate of hours upon hiring and a rest period of at least 10 hours between shifts (or time-and-a-half pay if the employee agrees to forgo the rest period). July 1, 2020

 

Virginia

Law Summary Effective date 
Virginia Presumption of employee status and misclassification of employees Any individual who performs services for payment is presumed to be an employee unless the business can prove the individual is an independent contractor based on IRS guidelines.

 

Prohibits employers from classifying workers as “tipped employees” if the worker is prohibited from soliciting tips. The guidance suggests that the new misclassification laws create a private cause of action for individuals to bring claims against employers.

 

Note: Some provisions of the law do not take effect until January 1, 2021

July 1, 2020
Expansion of Discrimination and the Virginia Human Rights Act: the Virginia Values Act Prohibits discrimination in public employment, public contracting, public accommodation, apprenticeship programs, housing, banking, and insurance on the basis of sexual orientation, gender identity, and veteran status.

 

The update adds new language to include that discrimination on the basis of race includes discrimination because of an individual’s hair style, type, or texture.

 

Before these updates, the Virginia Human Rights Act mainly applied to employers with more than five and fewer than 15 employees. However, the new rules apply to all employers with 15 or more employees.

July 1, 2020
Accommodations for pregnancy, childbirth, lactation and the Virginia Values Act The law requires employers to “make reasonable accommodation to the known limitations of a person related to pregnancy, childbirth, or related medical conditions, unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer.” Employers of five (5) or more employees must comply. Examples of accommodations include more frequent or longer breaks.

 

The law prohibits employers from retaliating against employees for requesting or using a reasonable accommodation for pregnancy or related conditions.

Employers must post information regarding these rights:

 

  • in a conspicuous location in the workplace;
  • include the information in employee handbooks;
  • and provide the information to new employees, to an employee 10 days after she informs the employer she is pregnant, and to current employees by October 29, 2020
July 1, 2020
Virginia prohibition of low-wage non-compete agreements  Bans all non-competition agreements that are entered into on or after July 1, 2020 applicable to “low-wage employees — those who earn less than the average weekly wage of the Commonwealth (currently estimated at $1,107/week) and independent contractors who are compensated for services at an hourly rate less than the median hourly wage for all occupations as set by the U.S. Bureau of Labor Statistics ($19.63 per hour as of 2019).

 

This does not include workers who are predominantly paid through bonuses and commissions, as opposed to a base salary or hourly rate.

July 1, 2020
Virginia penalties for non-payment of wages  Increases the potential penalties that may be imposed on employers who fail to pay employee wages properly. The law allows the employee to sue for the amount of wages due, plus 8% interest and reasonable attorney’s fees.

 

Note: if the employer knowingly fails to pay the employee correctly, the law allows for recovery of three times the amount of wages owed, plus 8% interest and fees.

 

The Virginia Commissioner of Labor and Industry is also authorized to investigate and institute proceedings, including on behalf of multiple employees.

July 1, 2020
Virginia Wage transparency protection from retaliation Employees are protected when they inquire about, discuss or disclose information about their own or any other employee’s wages, or when they file a complaint with the Department of Labor alleging a violation of this law.

 

The new law does not apply to “employees who have access to the compensation information of other employees or applicants… as part of their essential job functions who disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information,” unless that disclosure is in response to a formal complaint or charge, made in connection with an investigation, proceeding, hearing or action, or is consistent with a legal duty to disclose the information.

July 1, 2020

 

Washington, DC

Law Summary Effective date 
Universal Paid Leave Amendment Act  The Act provides government-administered paid leave to DC employees including:

 

  • Up to 8 weeks per year to bond with a new child.
  • Up to 6 weeks per year to care for a family member with a serious health condition.
  • Up to 2 weeks per year to care for the employee’s own serious health condition.

Employers must maintain all records relating to employee leave (including payroll records and notices provided) for a minimum of three (3) years.

 

Wherever possible, employees must provide ten (10) days of advance written notice to their employers of the need to take paid leave. If they have a qualifying event, employees may file a claim for paid leave benefits with the Department of Employment Services.

July 1, 2020

 

Most jurisdictions have done a good job communicating these updates to employers, but if you’re feeling a little overwhelmed by it all, reach out to your HR or payroll service provider to see how they can help make sure you’re getting right. For more useful guides, check out our Payroll 101 resources or our informative articles about HR for small businesses.

 

Every effort has been made to provide the most up-to-date and accurate information. This article will be updated as additional updates are made available.

 

This information is not to be taken as tax, legal, benefits, or HR advice. Since rules and regulations change over time and can vary by location, please consult a lawyer or HR expert for specific guidance for your business.

 

Erin Ellison is the Content Marketing Manager for OnPay. She has more than 15 years of writing experience, is a former small business owner, and has managed payroll, scheduling, and HR for more than 75 employees. She lives and works in Atlanta.

Make Payroll a Breeze

OnPay pays your employees and does tax filings for you.