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Employment law changes to watch in 2021


The new calendar year always rings in some employment law changes, and 2021 is no different. This year, many states have enacted changes in employee leave policies; ended or extended some temporary exemptions put in place due to the coronavirus pandemic; and taken steps to improve diversity, equity and inclusion in the workplace.

Here are some of the major changes we’re following. All these employment law changes are effective Jan. 1, 2021 unless otherwise noted.

Federal employment law changes in 2021

There are three employment law changes at the federal level that may affect your organization.

  1. The minimum wage for federal contract workers increases to $10.95 per hour.
  2. Employers can choose to display only the last four digits of an employee’s Social Security number on their Form W-2, to reduce the risk of identity theft.
  3. Due to COVID-19, the Equal Employment Opportunity Commission (EEOC) in 2020 waived its requirement that private sector employers submit EEO-1 data. In 2021, however, private sector employers with 100 or more employees, along with employers with 50 or more employees and at least one federal contract or subcontract worth at least $50,000 must submit their 2019 and 2020 EEO-1 surveys. The deadline for submission hasn’t been set, but it’s expected to be after March 31, 2021. (Learn more about why consistent documentation is critical for EEOC compliance.)

Many states have been updating their family and medical leave laws in recent years, and some long-planned changes will take effect in 2021. There are newer laws, too, spurred by the COVID-19 pandemic, to protect workers’ health and the safety of their co-workers.

California’s AB 685 will be in effect through Jan. 1, 2023. Under this law, employers who learn of a possible COVID-19 exposure must give potentially exposed employees and subcontractors written notice within one day. Employers who learn of an outbreak of multiple cases have 48 hours to report the situation to public health officials.

Under AB 685, the notice must include relevant federal, state and local COVID-related benefits information along with the employer’s safety and disinfection plan. Employers are required to keep copies of any notices for three years. For more information, see the state’s page on the topic.

Colorado is extending its 2020 Family First Coronavirus Response Act coverage. All employers must provide two weeks (up to 80 hours) of emergency paid sick leave for all employees who need time off to quarantine, who are sick with COVID-19 or who are caring for a sick child or one who’s out of school due to the pandemic. For more information, see a summary of the law here.

Other state family and medical leave law changes

California, Colorado, Connecticut, Maine, Massachusetts, and New York all have updated or new leave laws, each with its own details and requirements.


California employers with five or more employees are required to give qualified employees up to 12 weeks of paid leave within a 12-month period under SB 1383. Qualifying reasons include:

  • Birth, adoption or foster care placement of a child
  • Caregiving for a family member with a serious health issue
  • An employee’s serious health condition (not including disability leave for pregnancy or childbirth)
  • Needs related to a family member’s active duty military service

For more information, visit California’s website on the topic.

California expanded its Domestic Violence Leave Law to include victims of crime and abuse (including physical or mental injury or the threat of physical injury) starting January 1, 2021.

Under California’s AB 2992 the state’s current domestic violence leave law will now prohibit employers from discriminating or retaliating against an employee who is the victim of a crime or abuse. Under this expanded law, the definition of victim now includes a person whose immediate family member is deceased as a direct result of a crime. Employers must allow the employee time off from work to obtain or attempt relief.

For more information on the expansion of this law, read the text of the legislation.


The Centennial State is also implementing a Healthy Families and Workplaces Law. Colorado employers with 16 or more workers must offer paid sick leave. On Jan. 1, 2022, the law will expand to cover all employers in the state.

The law also requires organizations to offer supplemental paid sick leave in case of a public health emergency, including unplanned child care responsibilities or an illness related to a public health emergency.

For more information, go here.


Connecticut has a new paid family medical leave law.

The collection of wage deductions will begin on Jan. 1, 2021, but the wage replacement benefits won’t be available to eligible employees until Jan. 1, 2022.

Employees who have earned at least $2,325 in the highest quarter of the first four of the five most recent quarters immediately before their application for leave, and who are either currently employed by a Connecticut employer or were employed by a Connecticut employer during the 12 weeks immediately preceding the application, are eligible to apply for paid leave

Qualifying employees can use up to 12 weeks of paid leave in a 12-month period for:

  • Birth, adoption, or foster placement of a child
  • Coping with a serious health condition
  • Caregiving for a family member with a serious health condition
  • Responsibilities related to a family member’s active duty military service
  • Donating bone marrow or organs
  • Reasons related to family violence

Qualified pregnant employees who need bedrest or limited activity may receive an extra two weeks of paid leave. Employers may require employees to use their other paid time off first before accessing CT FMLA paid leave benefits.

For more information, please visit the Connecticut’s website on the law.


Maine’s mandatory paid leave law requires employers with 11 or more workers in any location to let employees earn an hour of paid leave for every 40 hours worked. This rule includes overtime hours and starts when the employee is hired.

Eligible workers can earn up to 40 hours of paid leave per year. Employers can require a six-month waiting period before workers can start using their leave, and the law states that the leave can’t impose an undue hardship on the employer.

For more information on Maine’s law, visit the Maine Department of Labor website on the topic.


Private employers in the Bay State must offer up to 12 weeks of paid family leave and 20 weeks of paid medical leave each year, capped at a total of 26 weeks annually.

Eligible employees can use their leave to welcome a new child into the home, care for themselves or a sick family member, or deal with unexpected issues related to a family member’s military service.

To qualify, workers must:

  • Have earned at least $4,700 from their employer during the past 12 months
  • Have earned pay for at least 15 weeks

Employees can use their leave to implement an intermittent or reduced work schedule, as long as their employer agrees to it.

For more information on the law, visit the state’s employer’s guide to paid family and medical leave.

New York

New York State’s Sick and Safe Leave Law requires all employers to offer some form of leave, based on size and net income.

  • Businesses with four or fewer employees and less than $1 million in annual net income must offer up to 40 hours of unpaid leave. Businesses of that size with more net income must offer up to 40 hours of paid leave.
  • Larger businesses with up to 99 employees must offer 40 hours of paid leave.
  • Companies with 100 or more workers must provide 56 hours of paid leave.

Employees earn an hour of leave for every 30 hours worked, including overtime. They can use it in increments as small as four hours, and unused leave must roll over to the next year. Workers can use their leave to care for themselves or a family member, or to get planning and relocation services related to domestic abuse.

For more information, visit New York’s Paid Sick Leave website.

Other state employment laws changes in 2021

Most of the other major new state labor law changes for 2021 support diversity, equity and inclusion.

Anti-harassment training requirements

California’s deadline for anti-harassment training, which was set in 2019, expires January 1, 2021. State law allows for employers to hold this training remotely for individual employees or groups.

In 2020, Connecticut extended its Oct. 1 deadline for all employers to provide some or all of their employees with anti-sexual harassment training. The new deadline is January 1, 2021.

All Connecticut employers, including family-only businesses, must provide two hours of training to supervisors. Employers with three or more employees must also give nonsupervisory employees two hours of training.

New laws on equal pay

Employers in California must file their first yearly California Pay Data Report with pay data for 2020 to the California Department of Fair Employment and Housing by March 31, 2021. For more information on this law, see the legislation here.

Colorado’s Equal Pay Act requires employers to:

  • Avoid making compensation decisions based on an employee’s sex or other protected status.
  • Create a written job description for each role in their organization.
  • Post open positions, including job descriptions and salary range, before filling those positions.
  • Not ask applicants about their previous salaries.
  • Retain each employee’s job description and pay history as long as they’re employed and for two years after.

For more information on Colorado’s pay equity law, go here.

Minimum wage and salary exemption increases

California’s state minimum wage increase for 2021 requires employers with 25 or fewer employees to pay at least $13 per hour. Larger employers must pay at least $14 per hour.

This state minimum wage increase also results in an increase in the minimum salary level required for exempt employees in California because the minimum weekly salary level is two times the minimum wage for a full-time employee. The result is $1,120 per week or $58,240 annually.

If your organization has employees in California, it’s also important to review the minimum wage requirements for all the cities and counties where you operate. Many local governments have implemented their own minimum wage requirements.

(Click here for more information on California’s state minimum wage.)

In Colorado, the salary exemption threshold increases to $40,500 and will stay at that level through the end of 2021. Nonprofit organizations with less than $50 million in yearly gross revenue and for-profit employers with less than $1 million in yearly gross revenue are exempt from this change.

For more information, view this Colorado Department of Labor and Employment document.

Ban the Box

Colorado’s Ban the Box Act, which took effect for larger employers in 2019, takes effect for employers of all sizes September 1, 2021. The law prohibits employers from asking candidates about their criminal histories or discouraging candidates with criminal histories.

Summing it all up

Employment law changes in 2021 can create complex new tracking and reporting requirements, especially for businesses that operate in more than one locale.

You may want to consider outsourcing your employment law compliance or supporting your HR team’s efforts by working with a PEO.

Learn more about reporting, tracking and more when you download our free e-book HR compliance: Are you putting your business at risk?