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New Labor Laws: How the Latest Federal and State Updates Affect You

By Roy Rasmussen Reviewed By Mike Lucas
By Roy Rasmussen
By Roy Rasmussen Reviewed By Mike Lucas

Sweeping new labor laws recently took effect at the federal and state levels. 

Here’s our guide to 2021 employment law updates.

Overtime Pay Employment Law Updates

One of the most important recent employment law changes at the federal law level is an overtime update issued by the U.S. Department of Labor which went into effect Jan. 1, 2020. 

The new rule raised the earnings threshold necessary to declare executive, administrative and professional employees exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA), which sets guidelines affecting full-time and part-time workers in the private and public sectors.

Under the new employment regulations:

  • The standard salary level to declare executive, administrative and professional employees exempt rose from $455 per week (about $23,3660 a year for full-time employees) to $684 per week (about $35,568 annually)
  • The total annual compensation requirement to designate workers as highly-compensated employees who are exempt from minimum wage and overtime requirements rose from $100,000 a year to $107,432

The updates include special salary level changes which apply only to employees in U.S. territories and in the motion picture industry.

In addition to these threshold changes, the new regulations allow employers to count nondiscretionary bonuses and incentives paid on at least an annual basis toward standard salary level requirements, up to 10% of required levels. This includes commissions.

State and Local Minimum Wage Increases

Another set of labor laws, many ushered in 2021, was changes to state and local minimum wage requirements. More than 20 states are increasing their minimum wage levels this year, according to Paycor, a human resources software company. Most changes went into effect as of Jan. 1, 2020, but some won’t kick in until later in the year. States with new minimum wage levels either already enacted or scheduled to go into effect include:

  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut (on Aug. 1, 2021)
  • Florida (on Sept. 30, 2021)
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Missouri
  • Montana
  • Nevada (on July 1, 2021)
  • New Jersey
  • New Mexico
  • New York
  • Ohio
  • Oregon
  • South Dakota
  • Vermont
  • Virginia (on May 1, 2021)
  • Washington

In addition to these state changes, the minimum wage is set to increase later this year or at the beginning of next year in a number of cities and counties, mainly in areas with large urban populations including:

  • Many California cities, including Los Angeles, San Diego, San Jose, San Francisco and Oakland
  • Seattle
  • Albuquerque, N.M.
  • Santa Fe, N.M.
  • Minneapolis
  • Chicago and Cook County
  • New York City
  • Montgomery County, Maryland

These increases are subject to variables specific to the regulations governing each locale, such as business size. Check the laws applicable to your state, county and city. The Labor Department provides a link where you can see the latest state minimum wage laws.

A person wearing a mask enters a medical office.

Coronavirus Paid Leave Changes

Another important development involves the latest employment law updates for regulations governing paid leave for employees affected by the coronavirus pandemic. 

In March 2020, Congress passed the Families First Coronavirus Response Act (FFCRA), which granted employees of covered employers eligibility for:

  • Up to 2 weeks (80 hours) of paid sick leave at the employee’s regular rate if unable to work because of quarantine or symptoms awaiting diagnosis
  • Up to 2 weeks (80 hours) of paid sick leave at two-thirds of regular play if unable to work because of a need to care for individuals subject to quarantine or children unable to attend school or child care because of shutdowns
  • Up to 10 additional weeks of paid expanded family and medical leave at two-thirds of regular pay if employed at least 30 days and unable to work because of need to care for children unable to attend school or child care because of shutdowns

These provisions generally applied to public employers and private employers with less than 500 employees, with some exemptions for small businesses with fewer than 50 employees if the business would be jeopardized by the school and child care leave stipulations. The legislation provided a refundable payroll tax credit to employers for mandated leave.

The FFCRA was initially scheduled to be in effect from March 18, 2020, to Dec. 31, 2020. Congress renewed the FFCRA with changes under the Consolidated Appropriations Act of 2021, passed on Dec. 27, 2020. The changes extended the FFCRA’s tax credits as an incentive for employers to provide paid leave, but it dropped the act’s original mandatory paid leave requirement. 

The FFCRA was again renewed with tax credits but without the mandatory leave requirement by the American Rescue Plan Act (ARPA), passed on March 11, 2021.

Regulations for Employers Requiring Mandatory Coronavirus Vaccination

With COVID-19 vaccines becoming increasingly available, some employers are enacting mandatory vaccination requirements. 

The Equal Opportunity Employment Commission (EEOC) has issued guidance for employers to ensure that mandatory vaccination policies don’t violate antidiscrimination laws. The EEOC’s guidelines allow employers to require vaccinations, but emphasize that companies must recognize certain exceptions which may apply:

  • The vaccine must be generally available to the employee population for employers to require vaccinations (for instance, in some industries and areas, vaccines may not be available yet to workers under age 65)
  • Employers must allow exemptions for individuals who can’t receive a vaccination because of health or disability
  • Employers must excuse employees who have a sincerely held religious objection to receiving the vaccine
  • Employers with employees who are under collective bargaining agreements may have to negotiate with unions

Additionally, under the FLSA and parallel state laws, time spent getting mandatory vaccines may be classified as working time requiring compensation. Some states, such as New York, now have laws requiring paid time off for mandatory coronavirus vaccinations.

Employers also should be aware that requiring proof of vaccinations constitutes requesting health records, which brings privacy laws such as the Health Insurance Portability and Accountability Act (HIPAA) into play. For example, if employers wish to verify vaccinations directly with vaccine providers, they must have the employee submit HIPAA authorization for disclosure. Employers must keep employee vaccination data confidential under HIPAA.

These are only some of the regulations which may apply to employers with mandatory vaccination policies. Consult an attorney for a more complete review of applicable state and local laws.

The words “Salary History” are crossed out.

Salary History Question Bans

In recent years, a number of states seeking to promote fairer hiring practices have enacted bans on recruiters asking candidates questions about salary history. 

According to Paycor, a provider of human resources software, states and territories with salary history bans include:

  • Alabama
  • California
  • Colorado
  • Connecticut
  • Delaware
  • District of Columbia
  • Georgia
  • Hawaii
  • Illinois
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Missouri
  • New Jersey
  • New York
  • North Carolina
  • Ohio, Oregon
  • Pennsylvania
  • Puerto Rico
  • South Carolina
  • Utah
  • Vermont
  • Washington
  • Wisconsin

The exact scope of salary history bans varies by state. In some states, even if the candidate volunteers their salary history without the employer asking, the employer can’t use the information to determine pay. 

Employers also may be required to provide pay scale data upon request from candidates. Local laws also may apply. Check your state and local regulations for more information.

Ban-the-Box Laws Against Hiring Questions About Criminal Backgrounds

Many states and localities have also banned hiring questions regarding a candidate’s criminal history. These bans, known as ban-the-box laws, vary by state and locality.

Some state and local laws restrict employers from asking questions about criminal history during the initial job application. Others mandate that employers wait to ask questions about criminal history until after conducting an interview or extending a conditional job offer. Some states and localities have additional provisions, such as requiring employers to consider criteria to determine whether a criminal record should be grounds for denying employment. 

If an employer decides not to hire a candidate because of a criminal record, they may be required to provide notice and a chance for candidates to introduce mitigating circumstances surrounding their arrest.

Ban-the-box laws typically include certain exemptions. For example, they do not apply to jobs involving security or working with children.

States and territories with ban-the-box laws include:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Hawaii
  • Illinois
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New Mexico
  • Oregon
  • Rhode Island
  • Vermont
  • Washington

The scope of ban-the-box laws vary by state, and in some cases may only apply to certain employers, such as government employers or companies with a certain number of employees. 

Some localities have their own ban-the-box laws. Check your state and local regulations to ensure full compliance with all applicable laws.

Keep Current with New 2021 Employment Laws to Avoid Legal Hassles

This roundup of 2021 labor law changes is intended to help alert you to some of the most important changes which may affect your business. However, work labor laws are in constant change, especially at the state level, and many more changes have been made beyond what we can cover here. 

To ensure your compliance with all laws and regulations which apply to you, talk to an employment lawyer. You can keep up with labor law changes by following the Employment Law Information Network, a free resource for employment lawyers and human resources professionals, and by reading the latest human resources tips on our blog.

Roy Rasmussen Contributing Writer for Fast Capital 360
Roy is a respected, published author on topics including business coaching, small business management and business automation as well as an expert business plan writer and strategist.
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