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:
One of the key questions raised by the advent of the ‘gig economy’ is how participants in that economy will obtain critical benefits like health care, unemployment insurance, and retirement savings outside of a traditional employer-employee relationship. Ridesharing platforms Uber and Lyft maintain that their drivers are independent contractors and have fought to keep them from being reclassified as employees, which these companies fear would wreak havoc on their business models by requiring them to provide unemployment benefits, paid vacations, regular work hours, and so forth. Gig economy platforms argue that the people who use them for work enjoy a level of freedom and flexibility that they could not maintain as employees, so everybody wins from the independent contractor model. Since gig economy workers look a lot like employees, but not exactly, some economists have proposed that a new type of classification is needed to account for this type of work.
In the meantime, some gig economy platforms have experimented with ways to provide their user-contractor-employees with benefits without breaking their business models: Last August, Uber piloted a retirement savings program for drivers, and Care.com is trying out a peer-to-peer platform that allows customers who hire caregivers through the platform to contribute to their caregiver’s benefits, much like a traditional employer would. Other companies say they would like to provide benefits to their contractors but don’t, because doing so would risk having them reclassified as employees.
New York State has been trying to develop a legislative solution to this quandary since last year, working from a draft bill circulated by the online home-cleaning company Handy that would establish a model for gig economy workers to receive portable benefits while remaining independent contractors under state law. At the New York Employment Attorneys Blog last month, Harman Firm attorney Edgar M. Rivera explained how the bill would work: