Over the past several years there have been frequent and widespread efforts – often precipitated by unions – to increase the minimum wage at the local level to $15 as a means of addressing economic inequality. The movement, called the “Fight for $15,” has seen some success in several states as well as in numerous cities. Cities such as Seattle, New York, San Francisco, San Jose and others in the Silicon Valley of California have adopted a $15 minimum wage, usually to be reached by incremental increases over a period of years.
These local mandates by both states and cities have not been limited to minimum wage increases. Mandatory paid sick leave and paid family leave have also been required in many jurisdictions and are being considered by others. New Jersey and Rhode Island both have a paid family leave requirement. California has had a paid family leave requirement in effect for several years. Arizona implemented a mandatory paid sick leave policy for all employers as of July 1, 2017. New York also adopted a paid family leave somewhat similar to the unpaid federal Family and Medical Leave Act, to become effective for all employees as of Jan. 1, 2018. In both California and New York, the paid family leave is funded through employee payroll deductions and pays at a level somewhat similar to unemployment benefits.
In addition to the paid time off for qualifying circumstances, the laws also obligate the employer to provide employees utilizing the leave mandatory reinstatement to their job upon return and continued health insurance coverage during the leave as if the employee were working. In the case of the new Arizona sick leave law, if any adverse action is taken against an employee after requesting or taking such leave, it will be considered presumptively retaliatory. If utilized by employees to their full extent, the operational consequences of these mandated benefits could be dramatic for some employers.
These actions to mandate increased minimum wages and/or additional fringe benefits through state or local governmental action are part of a rapidly growing trend of workplace regulation through means other than federal legislative or agency action. It requires a new approach on the part of employers and their representative associations. Active engagement with state and local officials, state legislatures, city councils and local business groups should become a priority.
What these developments mean for the average employer is that if they are to protect themselves against potential claims, they must now not only be politically engaged, but also must stay abreast of workplace rules issued by every legal jurisdiction that exercises authority over them. Since this trend of more local rules is not likely to be reversed, it would also be prudent to designate someone, in your organization – such as Human Resources or a manager who is responsible for personnel matters – to closely monitor all local and state workplace regulations as well as any proposed legislation.
Employers have always been aware, at least in general, of their federal obligations to their employees, but we must now deal with the new dynamic of local regulation as it expands to even more aspects of the employment relationship.