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Employment laws to watch in 2018


Employment laws continue to evolve, and 2018 will usher in some big changes in two of our most populous states, California and New York.

The HR world is abuzz with all the implications of implementing New York state’s paid family leave legislation and California’s ban-the-box law, both of which went into effect January 2018.

If past trends are any indication, these new laws will likely spread to other parts of the country soon, so it’s good to be aware of the changes because you may see them soon in your state.

Paid family leave

New York State’s paid family leave legislation is billed as the country’s strongest. The law was signed in 2016, giving employers a little over a year to accommodate this new requirement.

The new law requires all private employers to give employees eight weeks’ leave to bond with a new child, care for a close relative who is seriously ill, or help relieve pressure when certain family members are called to active military service. This requirement increases to 12 weeks of leave by 2021.

Paid family leave is funded through an additional payroll tax deduction and offers 50 percent of employees’ base wages up to a certain amount in 2018, with gradual increases to 67 percent of average weekly earnings by 2021. The state provides a weekly deduction calculator so companies can estimate payroll deductions.

Eligible employees must have worked for their employer full-time for 26 consecutive weeks or part-time for at least 175 days prior to the start of the leave.

Other stipulations of the law:

  • Employees must apply for this leave as soon as reasonably possible.
  • Employees are guaranteed their same or a similar position upon return.
  • An employee’s health insurance continues during their leave, as long as the employee pays their usual portion of the premiums.
  • Notice of the law must be posted in public areas of the workplace, such as the break room.
  • Employers must give staff written notice of their new rights, either by updating their employee handbook or distributing individual notices.

Employers are required to obtain paid family leave insurance. This is generally added to the disability policy your company should already carry. If your company self-insures on disability benefits, you may purchase a separate paid family leave policy or apply with the state to self-insure.

Incorporating this new requirement into a company’s benefits may be particularly difficult for small organizations where being one man (or woman) down has a significant impact on workflow.

It also presents a dilemma for businesses operating in multiple states, including New York. Do you offer this leave to all employees, whether they work in New York or not? Your payroll system should be able to accommodate different payroll tax deductions required for different jurisdictions, but providing employees in New York more leave than your employees in other states can cause morale problems.

However, paid family leave legislation is part of a larger trend to improve upon federal requirements under the Family and Medical Leave Act (FMLA). Expect more states and municipalities to follow suit.

Ban the box

To help people with a criminal history find employment, California passed AB1008, which has become known as the ban-the-box bill. It also took effect on Jan. 1, 2018.

Modeled after legislation already in place in Los Angeles, the bill forbids private companies with five or more employees from asking about an applicant’s criminal history in the hiring process. This means your applications cannot have a checkbox that asks about criminal convictions or arrests.

Employers may only ask about criminal history after making a conditional offer of employment and may not rescind that offer based on criminal history until an individual assessment has been performed.

This assessment must consider:

  • The nature and gravity of the offense or conduct
  • The time that has passed since the offense or conduct, and completion of the sentence
  • The nature of the job held or sought

So, someone with a shoplifting or embezzlement conviction may be reasonably denied a cashier or accounting position. Likewise, you may rescind a truck-driving job offer to a person with recent drunk-driving convictions.

But it’s more complicated than that.

If you pull back a job offer, the applicant must be notified in writing, and this written notice should:

  • Explain the disqualifying conviction or convictions that have caused you to rescind the job offer.
  • Include a copy of the conviction history report.
  • Alert the applicant that they have the right to respond within at least five business days, and they may submit evidence challenging the accuracy of the conviction record or present mitigating circumstances.

During this five-day period, the employer cannot make any final hiring decisions, such as hire someone else. If the applicant responds with records challenging the employer’s information, you must consider the information in their challenge before making a final decision.

Salary history verboten

Also new in California as of Jan. 1, 2018, employers may no longer ask for salary history on an employment application or during an interview. The idea behind this equal pay legislation is to reduce pay inequities for women and minorities since companies must now offer a salary range or an hourly rate based on their budget rather than on a previous salary.

Delaware, Massachusetts, Oregon, and the cities of Philadelphia and New York City have already passed similar laws.

What you can do now

 It’s important to maintain compliance with all local, state and federal employment laws for a host of reasons. First, compliance helps you avoid the fines, negative publicity, and the expense and time spent combating lawsuits. Second, being known as a good employer helps you compete for exemplary employees as the labor market tightens.

How can you make sure you’re up to date on all the rules and regulations that apply to your business?

Even if you employ an HR specialist, they will likely still need additional guidance on current employment issues. For that, you can enlist the services of a professional employer organization (PEO) or hire an employment attorney. Although they offer different services, both types of professionals should be able to advise you on various aspects of compliance.

If you decide to hire a PEO to assist you, consider looking for those with the certified professional employer organization (CPEO) designation from the IRS.

You’ll also need to train your managers so that they’re aware of these new laws and regulations.

One of the most effective ways to stay compliant is to create an employee handbook and update it annually. A PEO will produce an employee handbook for you that reflects your company’s policies and values. Or, you can also produce your own handbook using readily available software.

Think of an employee handbook as a guide for all managers and employees that allows them to easily access details such as paid holidays or how you handle maternity leave.

While a handbook may take some time to produce the first time around, it will provide transparency so that everyone in your company knows, or has access to, all the rules regarding their employment. Plus, when you or a manager has to say “no” to an employee request, it may help soften the blow if you can point to a company policy.

Something to keep in mind

Remember, the new paid family leave and ban-the-box laws will apply to any employee working in the states where they’re in effect, including remote workers. Even if your company offices elsewhere, any employee in New York or California is protected by these new laws.

Want to learn more about how you can stay up to date on current labor and employment laws? Download our e-book, Employment Law: Are You Putting Your Business at Risk?