Employment Law Changes for 2016

Bull-Blog-ImageThis article briefly summarizes federal and state law changes and emerging trends in employment law for 2016. State information is included for Arizona, Colorado, Utah, Montana, New Mexico, and Wyoming.

U.S. Supreme Court

In a 5-4 decision, the U.S. Supreme Court held last June that the right to marry is fundamental, and under the 14th Amendment, states must provide marriage licenses to same-sex couples and recognize same-sex marriages that were made in other states. Obergefell v. Hodges (U.S. 2015). Prior to this decision, same-sex marriage was legal in 37 states.

Also in June, the Court handed down an 8-to-1 decision in Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc. (U.S. 2015), holding that to prevail in an intentional discrimination claim, a job applicant need only show that need for an accommodation was a motivating factor in the employer’s decision, and that it is not necessary that an employer have knowledge of this need. Put another way, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he or she has no more than an unsubstantiated suspicion that accommodation would be needed.

White-Collar Exemption

In July, the U.S. Department of Labor (DOL) issued a proposed rule to increase the minimum salary, or salary basis, for exempt “white-collar” employees from $23,660 a year—a figure that has been in place more than 10 years—to about $50,440 in 2016. The DOL’s proposed rule calls for the standard salary level to be set at the 40th percentile of weekly earnings for full-time salaried employees and includes language that would update this figure annually. Under the proposed rule, an assistant manager making $35,000 per year would no longer satisfy the salary-basis test for exempt, white-collar employees and would instead be a nonexempt employee entitled to overtime.

No one can say with certainty when the proposed rule will become final, but it may not be until mid-2016 or later.

Home-Care Workers

In August, the federal Court of Appeals for the D.C. Circuit upheld a U.S. Department of Labor (DOL) rule that requires minimum wage and overtime coverage for some two million home health care workers employed by a home health care agency who live with the person receiving care. The rule was originally set to take effect on January 1, 2015, with the DOL saying it would allow companies a year to fully comply. At this time, it is unclear when the revived rule will be fully enforced.

Federal Contractors

In September, the DOL announced that minimum wage for some federal contractors will increase to $10.15 per hour on January 1, 2016, while the minimum cash wage for tipped employees will rise to $5.85 per hour on the same date.

The increases are in line with Executive Order 13658, which established a minimum wage for federal contractors. President Barack Obama signed the Executive Order in February 2014.

The minimum wage requirements apply to procurement contracts for construction covered by the Davis-Bacon Act; service contracts covered by the Service Contract Act; concessions contracts; and certain contracts in connection with federal property.

On Labor Day, President Obama signed a new executive order requiring paid sick leave for employees of federal contractors. Workers must earn at least one hour of paid sick leave per every 30 hours worked, and employers may set a limit for the accrual at no less than 56 hours. Paid sick leave can be used for:

  • Physical or mental illness, injury, or medical conditions;
  • Obtaining diagnosis, care, or preventive care from a health-care provider;
  • Caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity who has any of the conditions outlined in the Executive Order;
  • Domestic violence, sexual assault, or stalking, for specified purposes.

Under the Executive Order, paid sick leave carries over from one year to the next. Employers are not required to pay employees for accrued but unused paid sick leave upon separation from employment; however, employees who separate but are rehired within 12 months will have their paid sick leave balances restored. The Executive Order does not prohibit employers from offering a more generous paid-leave plan.

Regulations to implement this Order are expected by September 1, 2016, and the requirements become effective on January 1, 2017. The White House has also published a fact sheet.

While the Executive Order will not become effective for quite some time, employers with federal contracts or aspirations thereto should be planning to provide paid sick leave to their employees.

Minimum Wage

The 2016 proposed minimum wage rate for Colorado is $8.31 per hour. The new rate will take effect January 1, 2016.

Utah’s minimum wage will remain at $7.25 per hour in 2016.

Arizona’s minimum wage will remain at $8.05 per hour in 2016.

Montana’s minimum wage will remain at $8.05 per hour in 2016. 

New Mexico’s minimum wage will remain at $7.50 per hour in 2016.

Wyoming will continue to default to the federal minimum wage of $7.25 per hour in 2016.