Even as the Trump administration rolled back numerous Obama-era regulations at the federal level and took more employer-friendly stances on a number of hot-button labor issues, 2017 also witnessed the continued proliferation of new laws and regulations in states and localities, particularly those whose legislatures are dominated by Democrats. Many of these policy changes came into force on January 1, while others will become effective later in 2018, meaning countless US organizations will have to adjust to a new and more complex regulatory landscape this year.
Minimum Wages Rise for Millions of Workers
To begin with, minimum wages rose on Monday in 18 states, including several that passed referenda to that effect in 2016. Arizona, California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, Vermont, and Washington saw increases ranging from 35¢ to $1.00 per hour due to legislative or ballot measures, while the pay floors in Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota, which are pegged to inflation, rose automatically. The left-leaning Economic Policy Institute calculates that 4.5 million employees in total will see their pay increase thanks to these measures—though opponents of minimum wage hikes would argue that some of these employees will be laid off as their employers can no longer afford to pay them at the new rate.
California Keeps on Being California
With its huge labor market, diverse economy, and liberal government, California is a longstanding laboratory of progressive legislation, which serves as a bellwether for emerging regulatory trends and has an impact beyond the state’s borders as multi-state employers often opt to comply with California’s stricter rules nationwide for simplicity’s sake. A number of new laws came into effect in the Golden State this week that employers there need to be aware of. Mark S. Spring, a partner at Carothers DiSante & Freudenberger LLP, breaks down all of these changes at TLNT. Here are the changes in brief:
Current federal law in the US does not require organizations to grant employees any paid time off, be that vacation, family leave, or sick days. Most companies provide some kind of paid leave as part of their rewards policies in order to be competitive in the talent market, but advocates for federal mandate say the workers who need paid leave the most (low-income, single working mothers, for example) are least likely to get it unless their employers face some regulatory pressure. Demand for this protection has led to the emergence of paid family and medical leave mandates at the state and local level.
Representative Mimi Walters, a Republican from California, is backing a bill that would encourage companies to provide two to three weeks of paid time off by exempting them from stricter state and local mandates as long as they comply with the federal policy. As Bloomberg’s Jeff Green and Rebecca Greenfield explain, the bill envisions a national paid time off policy combining vacation, sick days, and other forms of leave into one category, and legislating a federal standard for businesses to meet; liability under tougher state and local rules would apply only to businesses that failed to meet that standard.
Walters’s bill, which is supported by SHRM and other major business groups, is similar in this regard to the proposal issued by the HR Policy Association earlier this year calling on the federal government to enact a national standard for paid parental leave—not to force compliance on their members, but again to protect them against the patchwork of local regulations that are popping up. States including Arizona, California, Connecticut, Massachusetts, Oregon, Vermont, and Washington, as well as major cities like New York and San Francisco, have instituted their own sick leave or parental leave requirements in recent years. Businesses are now beginning to see a less restrictive federal policy as a better solution than no policy at all.
Another reason businesses like the bill (whose chances of actually becoming law are currently uncertain) is that unlike most of these local mandates, the proposed federal policy would allow employers to deny requests for time off. “Opponents say that’s a cruiser-sized loophole,” Green and Greenfield write:
Mothers in Switzerland are entitled to 14 weeks or 98 days of maternity leave, paid at no less than 80 percent of their average income. In contrast to other European countries, however, Swiss employers are not required to grant paternity leave to new fathers. An initiative is underway to change that, however, and a petition to mandate four weeks of paid paternity leave has garnered the 100,000 signatures needed to trigger a national referendum, Ivana Kottasová reports at CNN Money:
The initiative, launched in July, calls for 20 days of paid leave for new fathers. Under the proposal, the dads must take five days off within the first 10 days after the birth of their child. The other 15 days could be taken at any point during the first six months of the baby’s life. They would receive 80% of their average income during the leave.
The Swiss parliament narrowly rejected a similar proposal in April 2016. That decision can now be overruled by the referendum. … The average paternity leave — paid and unpaid — across the EU is just over 12.5 days, so the proposed 20-day leave would be among the most generous in Europe.
Currently, Swiss fathers are allowed to take just one or two “special days off”—a generic form of paid leave for personal matters—after the birth of a child. Organizers of the petition say opinion polls show the vast majority of Swiss citizens are in favor of paid paternity leave, and that the annual cost of the mandate would be less than 1 percent what the country currently spends on pensions each year.
A bill introduced in the UK parliament last week would give employed parents the right to paid time off in the event of the death of their child, Hayley Kirton reports at People Management:
The new private member’s bill, which is backed by the government, effectively makes good the promise made by Theresa May to create a right to leave on the death of a child shortly before the Conservative party election manifesto was launched.
A right to time off when a child dies does not expressly exist in law at present. Instead, the Employment Rights Act allows employees to take a ‘reasonable’ amount of unpaid time off to deal with an emergency involving a dependent. Although a campaign for two weeks’ paid leave for those who had lost a child successfully led to a bill being brought to parliament last year, this was never fully passed and has not become law.
Charles Cotton, performance and reward adviser at the CIPD, told Kirton that many large organizations in the UK already offered paid leave to bereaved employees, but smaller employers often do not have explicit policies. He called the bill an opportunity for HR departments to re-evaluate how they handle grief in the workforce.
Mastercard has expanded its leave policy for employees who experience the loss of a family member, extending up to four weeks of paid leave to all of its more than 10,000 employees worldwide, Kathryn Mayer reports at Employee Benefit News:
Employees will be able to take up to 20 days for the loss of a spouse, domestic partner or child, 10 days for the loss of a parent, grandparent or sibling and five days for all other extended family, including aunts and uncles.
Previously, U.S. employees of the company were given five days of leave for the loss of a family member, with the option for up to an additional 10 days for a spouse, partner or child, for a total of 15 days. Outside the U.S., the leave policy varied across each country and in most cases was less than five days. The changes make the policy universal for all global employees.
Washington State has joined the handful of US states that have enacted laws requiring organizations to provide minimum paid family and medical leave benefits for their employees, the Seattle Times reports, after Governor Jay Inslee signed a bipartisan bill into law on Wednesday:
The measure offers eligible workers 12 weeks paid time off for the birth or adoption of a child or for the serious medical condition of the worker or the worker’s family member beginning in 2020, or 16 weeks for a combination of both. An additional two weeks may be used if there is a serious health condition with a pregnancy. …
Under the new law, both employers and employees pay into the system, and weekly benefits are calculated based on a percentage of the employee’s wages and the state’s weekly average wage — which is now $1,082 — though the weekly amount paid out would be capped at $1,000 a week. Workers who earn less than the state average would get 90 percent of their income. Employees must work at least 820 hours before qualifying for the benefit.
Self-employed individuals who elect coverage pay only the employee share of the premiums, and employers with 50 or fewer employees are exempt from paying the employer share. Companies that already offer such programs can opt out, as long as they are at least equivalent to the state program.
Washington’s legislature first passed a family leave mandate a decade ago, but failed to devise a plan to pay for it until this year. The state also passed a paid sick leave law last year. Other states with family leave mandates include California, New Jersey, New York, and Rhode Island, as well as Washington, DC—though New York’s law will not take effect until next year, while the District’s mandate comes into force in 2020.
Microsoft this week became the latest major US employer to introduce a paid leave program for employees who need to take time off to care for sick or disabled family members. EVP of Human Resources Kathleen Hogan announced the new benefit in a LinkedIn blog post on Tuesday:
Family caregiver leave allows an employee to take up to four weeks of fully paid leave to care for an immediate family member with a serious health condition. To date, we have onboarded 22 countries with this new benefit—and today it is now available to all U.S.-based employees. We will onboard the remaining countries over the coming months, ensuring it’s available to all our employees across the globe.
This important new benefit represents a significant milestone in our effort to build a culture of diversity and inclusion, and it demonstrates our deep commitment to employee wellbeing and care, and respect for the full career journey.
Several other large employers have added similar benefits in the past year. Last September, Deloitte began offering its employees 16 weeks of paid family leave for caregiving, and Facebook rolled out a caregiving leave benefit, as well as bereavement leave, in February. Other companies make paid time of for caregiving available through their PTO, family leave, or discretionary leave policies, Fortune’s Barb Darrow adds: