It’s that time of year again, and we’re not just talking about the holidays. With the new year comes new laws that impact how you do everything from handle your employee data to your benefits and payroll policies. You’ll want to take a close look at new legislation coming online in 2021 to make sure you’re ahead of the changes.     

We’ve put together a list of some of the more notable new laws, including state specific information and helpful links. You can also view a compilation of state-specific new employment laws if you want to take a closer look into your state.

Minimum Wage Laws

Many states and municipalities already have minimum wage increases in effect, which is a trend that’s increasing across the nation in 2021. Multiple states have passed increases, including Florida, which will see an annual minimum wage increase of $10.00 an hour beginning in September 2021.  This is part of a larger, six year plan to increase it to $15.00 per hour.

In California, employers with 25 employees or less must follow the new minimum wage order of $13 and companies with 26 employees or more must pay $14. Additionally, these Californian city and counties have also imposed local minimum wage increases:  

  • Belmont: $15.90  
  • Daly City: $15.00 
  • Hayward: $15.00 
  • Novato: $15.00 
  • San Diego: $14.00
  • Santa Clara: $15.65
  • Santa Rosa: $15.20 

You can find the current minimum wages laws by state by visiting the U.S. Department of Labor or your state’s labor website.

Paid Sick Leave Laws

Effective January 1, 2021, Colorado employers with 16 or more employees must provide paid sick leave, accrued up to 48 hours annually.  In 2022, the new law will apply to all employers regardless of size. Also effective in January 2021, Maine employers with 10 or more employees must provide 40 hours of Protected Time Off annually to its employees.  The law allows employees to use this time off for any reason, including vacation.

Paid Family Leave Laws

Colorado joined a handful of other states that provide a statewide program for paid family and medical leave. The leave is funded by employer and employee payroll taxes, which begin in January 2023 with benefits payable starting in 2024.  Other states that already have state mandated paid family leave programs include California, Connecticut (effective 2022), District of Columbia, Massachusetts (effective 2021), New Jersey, New York, Oregon (effective 2023), Rhode Island, and Washington state.

Marijuana Legalization

Three states passed measures to legalize recreational marijuana, including Arizona, Montana, and New Jersey. Medical marijuana is already legal in these states.  South Dakota legalized recreational and medical marijuana, while Mississippi legalized just medical marijuana. In light of these changes you will want to reexamine your drug testing policies to be in line with what’s required and allowed by your state. For instance, in Nevada, an employer can test for marijuana but cannot take any adverse action.  In New York City, employers cannot include marijuana in its pre-employment drug tests. Look for upcoming articles on this topic.

Tips for staying compliant

Knowing the law is only half the battle when it comes to compliance. Your company must be on top of legislation in theory and in practice. The following tips can help your organization stay ahead of regulations and out of trouble.

  1. Regularly visit your state’s Department of Labor website and official city sites for updates and information. Sometimes you’ll also see classes and other sources of localized info that can help you have a better understanding of your obligations under the law. The federal Department of Labor offers a comprehensive list of links to every state’s labor-related resources. Bookmark it and encourage everyone to visit it regularly.

  2. Appoint one person from each department to be in charge of staying up to date on legislation that impacts their area of focus.  For instance, select a senior member of your payroll or benefits team and charge them the task of with compliance continuing education. They will be responsible for helping the team stay up to date on payroll or benefits related laws and new legislation. 
  3. Revisit your processes several times a year to make sure that they are efficient and that they still keep you compliant in light of new legislation. Some things to look at include how you handle employee data, how long you store records, your processes for onboarding and terminating, along with your benefits administration policies. And remember, it’s often the smaller aspects of administration that can lead to trouble, like failing to follow your state’s laws regarding issuing final paychecks or your data-handling policies. Take a look at these problems and make sure your organization is not making simple, but common administrative mistakes.

  4. Last but not least, consult an expert. If you’re in doubt or have questions about how a law applies to you, get professional advice. Depending on the nature of the question, your payroll or benefits administration service may have someone on staff that can help. There are also attorneys that specialize in labor law that can help you get clarity. Additionally, you may be able to direct your questions to your state’s labor board, just be prepared to wait for a response.

These are only a handful of the new laws going into effect in the new year. Your state, and city may have additional legislation coming online. There may also be laws that apply specifically to your industry going into effect. For this reason, it’s important that you visit local government websites, like your state’s board of labor, for additional guidance. 

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.