Expense Reimbursements Are Not Included in FLSA Regular Rate

On November 8, 2024, the U.S. Department of Labor (DOL) issued Opinion Letter FLSA2024-01 to address whether expense reimbursements are included in the regular rate of pay. Generally, bona fide expense reimbursements are excluded from the regular rate. However, simply labeling a payment as a reimbursement does not exempt the payment from treatment as compensation; it must be a legitimate reimbursement. Moreover, only the actual or approximate reimbursement amount may be excluded from the regular rate; any overage must be treated as compensation.

 

Alaska: Voters Approve Minimum Wage Increase

Alaska voters approved Ballot Measure No. 1 which increases the minimum wage to $13.00 per hour effective July 1, 2025, $14.00 per hour effective July 1, 2026, and $15.00 per hour effective July 1, 2027. Each year thereafter, the minimum wage will be adjusted for inflation and must be at least $2.00 more per hour than federal minimum wage. Tips and gifts do not count toward minimum wage.

 

California: Prohibition Against Mandatory Arbitration of Sexual Harassment Claims Applies to All Claims in a Case

On September 30, 2024, in Doe v. Second Street Corp., the California Court of Appeals stated that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which prohibits the mandatory arbitration of sexual assault and harassment claims, applies to other causes of action in a filed Compliant that did not include sexual harassment or sexual assault because they were part of the same “case.” The EFAA may now be used to preclude arbitration of all claims alleged simultaneously with sexual harassment or assault claims.

 

California: PAGA FAQs Released

In October 2024, the Labor & Workforce Development Agency (LWDA) published FAQs around the recent reforms to the Private Attorneys General Act (PAGA). The FAQs highlight that any current or former employee who has experienced each of the alleged violations of labor laws may file a PAGA lawsuit. A PAGA lawsuit is used to recover civil penalties, the amount of which depends on the type of violation, 65% of which goes to the State and 35% goes to aggrieved employees. Additionally, for PAGA notices filed on or after June 19, 2024, if an employer had taken all reasonable steps to comply with the law prior to receiving a PAGA notice, but a violation nonetheless occurred, the maximum civil penalty is 15 percent of the penalty sought.  If the employer takes all reasonable steps to be prospectively in compliance with the law within 60 days of the PAGA notice, the maximum civil penalty is 30 percent of the penalty sought.  Certain exceptions apply. PAGA also provides employers the opportunity to cure, or correct, certain violations during the notice period and avoid PAGA litigation and penalties. All PAGA settlements must be approved by the court.

 

California: Workers’ Compensation Benefits Increase

As of January 1, 2025, the minimum and maximum temporary total disability (TTD) benefits will increase for workers’ compensation claims. TTD increases are directly linked to State Average Weekly Wage (SAWW) annual increases. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury. Because of the most recent SAWW increase, the minimum TTD rate will increase to $252.03 (from $242.86); and the maximum TTD rate will increase to $1,680.29 per week (from $1,619.15 per week).

 

Illinois: IDOL Issues FAQ Guidance on New E-Verify Law

The Illinois Department of Labor (IDOL) has clarified, through a series of Frequently Asked Questions (FAQs), that Illinois private employers are not prohibited from using the federal E-Verify system, even if they do not have federal contracts. This guidance comes after confusion over the state’s recently amended Right to Privacy in the Workplace Act, which takes effect on January 1, 2025. The Illinois law states that employers cannot impose work authorization verification or re-verification requirements that exceed federal standards. However, the IDOL has clarified that this does not prevent employers from using E-Verify voluntarily. The guidance also confirms that neither the state nor any local government in Illinois can require employers to use E-Verify. This includes municipalities or home rule units.

 

Massachusetts: Voters Approve Unionization of Uber and Lyft Drivers

Massachusetts voters approved Ballot Question 3 which allows ride-hailing drivers, for companies like Uber and Lyft, to form unions  to collectively bargain for wages, benefits, and work conditions. There are a number of prohibited unfair work practices for transportation network companies (TNC) which hire these drivers. TNCs do have the right form multi-company associations to represent them while bargaining with a transportation network driver organization to create negotiated recommendations, which shall form the basis for industry regulations. The ballot measure is expected to go into effect as of December 5, 2024.

 

Massachusetts: Employers Required to Submit EEO Reports

Effective October 30, 2024, HB 4890 will require Massachusetts employers that have 100 or more employees and who are subject to federal EEO-1 reporting requirements to submit the previous year’s EEO-1 report to the Massachusetts Secretary of the Commonwealth by February 1 each year, with the first report due February 1, 2025. Additionally, employers subject to EEO-3 and EEO-5 reporting must submit the previous year’s EEO-3 or EEO-5 report by February 1 in each odd-numbered year, and employers subject to EEO-4 reporting must submit the previous year’s EEO-4 report by February 1 in each even-numbered year.

 

Missouri: Voters Approve Minimum Wage Increase

Voters approved Proposition A amending Missouri law to increase the minimum wage to $13.75 per hour effective January 1, 2025. Effective January 1, 2026, the minimum wage increases to $15.00 per hour. Proposition A also includes increases each subsequent year effective January 1 adjusted based on changes to the cost of living as reflected in the Consumer Price Index for Urban Wage Earners and Clerical Workers which is published by the U.S. Department of Labor. If the federal minimum wage ever exceeds Missouri minimum wage, then Missouri’s minimum wage will mirror the federal rate.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase