At MBL Benefits we continuously strive to improve your experience with our firm. In that light we are taking this opportunity to introduce our “General Counsel Updates” from our very own General Counsel & COO, Jim Woehlke, Esq., CPA.
To kick things off, as we start off the new year, we thought what better way than to share employment law and regulatory updates that will affect your day-to-day operations in 2019. We’ve put together an overview of the most pressing changes affecting federal laws, New York and California based employers.
Employment Law & Regulatory Updates
FEDERAL
New Maximums
Qualified Transportation & Parking Fringe Benefit Maximums
The qualified transportation/commuter and parking fringe benefits salary reduction contribution limits for 2019 were recently announced. Both the parking and commuter benefit pre-tax limits have been increased to $265/month.
HSA Maximums
For 2019, the maximum annual HSA contribution for individuals with self-only coverage will increase from $3,450 to $3,500, and the limit will be $7,000 (increased from $6,900) for individuals with family coverage.
401(k) Maximums
The new maximum deferrals for 401(k) plans are $19,000—a $500 increase—with employees over 50 able to defer an additional $6,000 annually, which is unchanged from 2018. In addition, only the first $280,000 of income of higher-paid employees may be used to determine safe-harbor contributions, a $5,000 increase from prior year.
FICA Tax Update
The rate of FICA taxes remain unchanged—6.2% for OASDI and 1.45% for Medicare for both the employer and employee; but the maximum income upon which OASDI tax is to be computed has been raised to $132,900, a $4,500 increase. This means that the for both employer and employee, the maximum OASDI tax to be paid this year is $8,239.80.
Additional Resources: IRS Revenue Procedure 2018-57, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits, https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2018.html.
STATE OF NEW YORK
Minimum Wage Increase
New York City: Effective December 31, 2018
Minimum salary requirements for exempt employees as well as the minimum hourly rate requirements for non-exempt employees are outlined below.
Minimum Salary Requirements
Individuals working in New York City who qualify for the Executive or Administrative employee exemption will need to meet the following minimum weekly wage requirements effective 12/31/2018:
| Location & Employer Size | 2018 Minimum | Post-2018 Minimum Salary |
| New York City (10 or Less Employees) |
$900/week ($46,800 annual rate) | $1,012.50/week ($52,650 annual rate) |
| New York City (11 or More Employees) |
$975/week ($50,700 annual rate) | $1,125.00/week ($58,500 annual rate) |
Individuals who qualify for other exemption categories such as Professional or Computer Exemptions must continue to meet the current Federal minimum wage of $455/week ($23,660 annual rate). This has not changed.
Minimum Hourly Rate Requirements
Individuals working in New York City who do not qualify for exempt status will need to meet the following requirements effective 12/31/2018:
| Location & Employer Size | 2018 Minimum | Post-2018 Minimum |
| New York City (10 or Less Employees) |
$12.00/hour | $13.50/hour |
| New York City (11 or More Employees) |
$13.00/hour | $15.00/hour |
Refer to this fact sheet to help you determine if an employee qualifies for exemption.
Additional Resources: New York Minimum Wage
New York Salary History Questions
Effective October 31, 2017 it became illegal for public and private employers of any size in New York City to ask about an applicant’s salary history during the hiring process. This includes advertisements for positions, on applications, or in interviews.
Additional Resources: NYC Salary History
New York Paid Family Leave
There are enhancements to the New York Paid Family Leave (NY PFL) benefit that go into effect on January 1, 2019.
Employees who begin their NY PFL on or after January 1, 2019 can take up to ten weeks of NY PFL and receive 55% of their average weekly wage, capped at 55% of the 2019 New York State Average Weekly Wage ($1,357.11). The maximum weekly benefit for 2019 is $746.41.
This is an increase from the 2018 benefit which allows up to eight weeks of NY PFL and a maximum weekly benefit of $652.96.
Note: Employees who begin their NY PFL in 2018 will be eligible for the 2018 benefit, even if the leave extends into 2019.
New York Sexual Harassment
The 2019 New York State Budget and 2018 Stop Sexual Harassment in NYC Act both included provisions to combat sexual harassment in the workplace. Under the new laws, employers must adopt a sexual antiharassment prevention policy and provide sexual antiharassment training to all employees working in New York State (NYS). Both City and State have issued standards to carry out these new requirements.
Harassment Training for all NYS employees is due by October 9, 2019.
MBL Benefits clients can now administer “Workplace Harassment Prevention” training for Employees and Managers through our ThinkHR platform. The platform allows you to track progress/completion and distribute company-wide or to an individual (ex – in the case of a new hire).
To Access the Trainings:
- Login to your ThinkHR account here
- Select “Training” in Main Menu
- Select “Harassment” icon on training page
- Choose the training you would like to administer:
- Workplace Harassment Prevention for Employees, State of New York
- Workplace Harassment Prevention for Managers, State of New York
If you have questions about using the system you should contact ThinkHR direct as that will expedite the troubleshooting process. They can be reached at support@thinkhr.com.
Additional Resources: NYS Sexual Harassment, https://www1.nyc.gov/site/cchr/law/stop-sexual-harassment-act.page
STATE OF CALIFORNIA
Minimum Wage Increase
California minimum wage requirements are set to increase effective 1/1/2019. Minimum salary requirements for exempt employees as well as the minimum hourly rate requirements for non-exempt employees are outlined below.
Minimum Salary Requirements
Individuals working in California who qualify for the Executive, Administrative or Professional employee exemption will need to meet the following minimum weekly wage requirements effective 1/1/2019:
| Location & Employer Size | Current Minimum | 1/1/2019 Minimum Salary |
| California locations (25 employees or less) |
$840/week ($43,680 annual rate) | $880/week ($45,760 annual rate) |
| California locations (26 employees or more) |
$880/week ($45,760 annual rate) | $1,125.00/week ($49,920 annual rate) |
Employees in the computer software field will be exempt under the professional exempt if the computer professional criteria applies.
|
Location & Employer Size |
Current Minimum | 1/1/2019 Minimum Salary |
| California locations of all size | $43.58/hour ($90,790.07 annual rate) |
$45.41/hour ($94,603.25 annual rate) |
Please read here to determine if your employee qualifies for an exemption under California wage and hour guidelines.
Minimum Hourly Rate Requirements
Individuals working in California who do not qualify for exempt status will need to meet the following requirements effective 1/1/2019:
| Location & Employer Size | Current Minimum | 1/1/2019 Minimum Wage |
| California locations (25 employees or less) |
$10.50/hour | $11.00/hour |
| California locations (26 employees or more) |
$11.00/hour | $12.00/hour |
Additional Resources: California Minimum Wage
California Lactation Accommodation
Newly enacted AB 1976 clarifies language within the current California Labor Code on lactation accommodation. The current language (which states employers must provide employees with a location, other than a toilet stall which is near their work, to express milk in private) is clarified with AB 1976 to indicate that employers must provide space other than a bathroom (vs. toilet stall).
Employers may be exempt if they can show undue hardship and if they otherwise make reasonable attempts to provide appropriate lactation space.
California Salary History Ban
California’s current labor code will be modified by AB 2282 to clarify several aspects of the current salary history ban. Specifically, it details employers may ask an applicant’s salary expectations for the position being applied for. Upon request, employers must provide pay scales to external applicants who have completed at least one interview. Employers are not required to provide pay scales to every applicant or current employees. There is an exception in AB 2282 that allows an employer to consider a current employee’s existing salary when making salary changes for that employee. Any wage differential between employees in the same position must be justified by one or more specified factors, including a seniority system, merit system, or other bona fide factor other than sex, race or ethnicity.
California Anti-Harassment/Anti-Discrimination Requirements
Broad confidentiality clauses in settlement agreements are now prohibited under SB 820. This new law prohibits such terms that prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment or discrimination based on sex, or retaliation for filing a claim of sexual harassment.
AB 2770 protects employers and victims of sexual harassment from defamation claims. An employee who makes credible reports of harassment will be protected from liability, as will an employer who communicates with interested parties such as victims and witnesses. Former or current employers are now able to inform a prospective employer whether or not their decision to rehire an employee is based on the fact that the current or former employer determined the employee engaged in sexual harassment. However, employers being asked for references or conducting or taking part in an investigation should exercise caution. The new law is not clear as to how much detail can be provided about the alleged harassment, and employers should consult legal counsel to ensure they do not release any information in violation of this law.
SB 1300 provides that, in claims alleging the employer failed to take all reasonable steps necessary to prevent discrimination and harassment from occurring, the plaintiff is not required to prove that they endured sexual harassment or discrimination. This bill also prohibits release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment.
California Compliance Topics to Keep on your Radar
California De Minimis Time-Reporting Rules
In July 2018, the California Supreme Court delivered an opinion challenging the long-standing de minimis doctrine. Until now, Federal Courts have long held that brief tasks non-exempt employees performed before or after clocking in (i.e. setting an alarm for the night, waiting for a computer to restart prior to clocking in) are acceptable “circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.” In Troester v. Starbucks Corporation, the California Supreme Court rejected the application of this doctrine and ruled that these types of tasks, when regular features of the job, are compensable time.
Additional Resources: California Refines FLSA De Minimis Rule
California Contractor Classification Updates
The California Supreme Court issued another landmark ruling in April 2018. The ruling in the class action Dynamex Operations West, Inc. v. Superior Court of Los Angeles may have significant implications for employers classifying workers as independent contractors in California. In this case, the courts rejected the generally accepted criteria for classifying workers as contractors (versus regular “employees”) and instead drew upon a much more stringent test for determining contractor classification.
Employers should review independent contractor classification carefully and consult with legal counsel as needed.
Additional Resources: Independent Contractors in CA and Implications of Dynamex
MBL Benefits Can Assist You
MBL Benefits has in-house general counsel to assist with compliance inquiries. If you need further assistance in understanding these new laws, communication to employees, or developing policies, we are available to assist you as needed.
Please feel free to contact us with any questions or concerns you may have.
This blog post is provided for informational purposes only and is neither intended, nor should it be construed to, constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company.
