4 Major Law Changes in 2020 for Employers

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January 07, 2020
Author: Ben Halverson
Organization: Lorman Education Service

Starting in 2020, several changes to employment law will affect businesses across all industries. These changes will affect employers with regards to how they budget payroll, classify employees, conduct the hiring process, and supervise behavior.

The following information discusses 4 major trends to watch in 2020, and in the years to come.

1. Classification of Independent Contractors

A large percentage of businesses rely on independent contractors to stay operational. Uber and Lyft are two prime examples of this business model.

The classification of workers as independent contractors allows many businesses to save money on benefits packages, worker's compensation insurance, and other costs associated with regular employees. However, more and more states, such as California, are enacting laws that restrict an employer's ability to categorize certain workers as independent contractors. Companies that heavily lean on the independent contractor classification for their profit margins should carefully research such regulations and make adjustments as necessary.

2. Minimum Wage/Salary Increases

On a federal level, the legislature amended the FLSA to include a minimum annual salary increase for most exempt employees (from $455 per week to $684 per week). In addition, several states have raised their minimum wage for 2020, including:

  • Arizona - an increase to $12.00 per hour ($13.00 in Flagstaff)
  • Colorado - an increase from $11.00 per hour to $12.00 ($12.85 in Denver)
  • New Mexico - wage increases throughout the state, including Albuquerque ($9.35/hr), Las Cruces ($10.25/hr), and Santa Fe ($9.00/hr)

In the months and years to come, other states may follow suit and establish higher minimum wage thresholds for residents.

3. Use of Medical Marijuana

Marijuana usage is a confusing subject when it comes to employment law. 10 states and the District of Columbia allows for both medical and recreational marijuana use; most other states only allow for medical usage. However, federal law classifies marijuana use as an illegal activity.

On the subject of employees that claim to need medical marijuana in order to perform their job duties, most courts have taken the position that such accommodations are not required on the part of employers. However, employers may find that the laws of certain states dictate just the opposite. 

The following list enumerates the only 17 states that have no laws in place to broadly legalize medical marijuana:

  • Idaho
  • Wyoming
  • South Dakota
  • Nebraska
  • Kansas
  • Texas
  • Iowa
  • Wisconsin
  • Indiana
  • Kentucky
  • Tennessee
  • Mississippi
  • Alabama
  • Georgia
  • North Carolina
  • South Carolina
  • Virginia

While most issues surrounding the use of medical marijuana have not been effectively resolved to date, this remains an area on which employers should keep a watchful eye. 

4. Bans on Salary History Inquiries

More and more state and local governments are enacting laws that prevent employers from inquiring into a job applicant's previous salary history. For instance, the 3 West Coast states (California, Oregon, and Washington) regulate salary history inquiries for all employers in some form; Kansas City, MO enacted a similar ordinance in October 2019. New York and New Jersey have also amended their employment laws to include salary history bans, effective January 2020.

The basic idea behind salary history bans is to prevent employers from perpetuating salary gaps based on factors such as gender or race. Employers affected by these bans should ensure that their interview processes are up to date, and recruiters are aware of such protocols.

It is vital that employers and HR professionals stay up to date on all the latest changes in employment law, both on the federal and state level. If you'd like to increase your knowledge of these changes, reach out to us today to enroll in our continuing education courses for company leaders, HR managers, and others.

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