New Year Brings New Employment Laws

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January 1, 2025 | By: Lisa I. Fried-Grodin, Esq.

As we usher in the new year, this is the perfect time to get informed about recent changes in federal, New Jersey and New York employment laws and to prepare for workplace legal changes coming in the year ahead. Here are some important legal updates regarding wage and hour laws, pay transparency, rights regarding pregnancy, pregnancy related conditions, childbirth and breastfeeding, and workplace dress codes.

WAGE AND HOUR AND PAY TRANSPARENCY LAWS

Salary rates for exempt employees

Employees who were expecting to start earning overtime pay or getting a salary bump in January 2025 due to new standards for exempt employees set by the US Department of Labor received bad news in November when a federal court in Texas struck down the  new standards on a national level.  In April 2024, the US DOL had issued a regulation establishing new salary standards employers had to pay employees to classify them as exempt from receiving overtime pay.  The new standards required employers to pay salaried exempt employees who do not receive overtime pay and are not classified as highly compensated employees  at least $43,888  per year ($844 per week) as of July 1, 2024 and a salary of at least 58,656 per year ($1,128 per week) as of January 1, 2025.   That regulation also increased the salary  for employees who qualify for exemption from overtime because they are “highly compensated employees” (“HCE”) from $107,432 per year to $132,964 per year as of July 1, 2024, a rate that was set to increase to $151,164 on January 1, 2025. 

These rate increases that were scheduled to become effective in July 2024 did go into effect at that point for all states other than Texas (see https://friedgrodinlaw.com/dont-rush-to-the-beach-before-you-hear-whether-salaries-for-exempt-employees-are-going-up-july-1/  and https://friedgrodinlaw.com/texas-federal-court-just-blocked-the-dol-new-salary-requirements-for-exempt-state-employees-in-texas-what-does-the-future-look-like-for-other-employers-across-the-country/ ).  However, in November,  the US District Court for the Eastern District of Texas, Sherman Division deemed all of the rate increases to be an excessive use of the US DOL’s authority under the Fair Labor Standards Act, the federal law that regulates overtime and minimum wage standards.  In its decision, the court found that that the US DOL exceeded its authority by increasing the salary rates so high that this eliminated the FLSA’ s duties test requirement that determines if an employee is exempt from being paid overtime pay.

Under the FLSA itself, the statute states that an employee is classified as exempt status if their job duties are consistent with that of an executive administrative or professional employee (“duties test”).  The statute has no requirement for salary to be part of the analysis, but the US DOL has long held that exempt status includes both a minimum salary test and a job duties test.  The now invalidated regulation was the US DOL's interpretation of a new minimum salary test for exempt status.  In striking the regulation, the ED of Texas held that the US DOL went way too far in defining and delimiting what the exempt status part of the FLSA means. 

Although, under the Biden Administration, the US DOL has filed a notice of appeal of this decision, it is unclear whether the Trump Administration will continue with this appeal. Accordingly, the rates the US DOL previously set in 2019 are now the required rates for an employee who meets one of the duties tests to be classified as exempt: That’s a minimum salary level of $35,568 for exempt employees who don’t meet the HCE standard and  $107,432 per year for those who meet the HCE standard.

For employees who thought they would either be getting a raise this month or becoming eligible for overtime pay for the first time because their annual salary was lower than the US DOL 2024’s salary rates, they may find themselves still classified as exempt but at a lower pay if they meet the duties test.  Employers that already raised employee’s salaries to comply with the July 2024 salary rate increases set by the US DOL or who reclassified previously exempt employees as nonexempt because they didn’t want to raise salaries of exempt employees that much may be contemplating undoing those prior compensation decisions.   However, the fate of the US DOL’s failed attempt to increase the salary rates for exempt employees beyond the 2019 rates is unknown, and rolling back prior salary increases given to employees and/or reclassifying employees’ exemption status can create significant morale issues.  Employers should consult employment law counsel to assess the best options going forward.

Deportation threats and concealment of wage and benefit violations

If the New Jersey Department of Labor (“NJDOL”) discovers that an employer has disclosed or threatened to disclose an employee’s immigration status to a government entity for the purpose of concealing the employer’s violation of state wage and hour laws, the unemployment law or the state temporary disability insurance law, the NJDOL now has the authority to impose significant penalties against such violators  Last May, the agency was empowered with the authority to issue penalties up to $1,000 for a first violation, up to $5,000 for a second violation and up to $10,000 for additional violations. Such penalties are in addition to the penalties and fines the agency already was empowered to impose on companies for violations of the New Jersey wage and hour laws, unemployment law or temporary disability insurance law.  Employers will have the right to request a hearing when they are notified of the violation.

The New Jersey Department of Labor has set up a section on its website to assist immigrant workers who may not feel safe assisting with enforcement actions against their past or current employer. See https://www.nj.gov/labor/myworkrights/worker-protections/immigrant_workers/  This website section provides information on assistance that NJDOL may be able to offer including (1) helping  such workers start the process of seeking temporary protection from deportation (“deferred action”) and (2) issuing certifications in support of a worker’s U visa or T visa if a worker is a victim of a crime or human trafficking.

Garden State Employers Face New Pay Transparency Obligations in June

In June 2025, most employers will be required to disclose information to current employees regarding promotion opportunities and to provide information on compensation and a description of benefits in all job postings and in internal postings regarding transfer opportunities and promotions. Failure to do so will result in fines from the New Jersey Department of Labor ranging from $1,000 to $6,001 depending on the amount of violations.

The compensation information employers must post includes the hourly wage or salary or a range of the hourly wage or salary, and any other compensation for which the employee would be eligible within the first 12 months of employment.

The new law covers private and public employers with 10 or more employees that do business with the state of New Jersey, employs persons within the state or takes applications within the state as well as job placement, referral agencies and employment agencies. Temporary help or service firms registered with the state’s Division of Consumer Affairs in the Department of Law and Public Safety must provide the pay and benefit information to applicants for temporary employment

Employers will be required to provide information on known promotion opportunities that are advertised internally or externally to all current employees in the affected department before making a promotion decision. The law will not require employers that promote an employee based on years of service to provide advanced notification of this to other employees.

Changes to Minimum Wage in New Jersey and New York

The minimum wage in both states increased January 1, 2025.   

In New Jersey, the minimum wage for most workers increased by 36 cents to $15.49 an hour. The state's minimum wage for other workers, including those working for seasonal employers and small business employers (companies with less than six employees),  long-term care staff, tipped workers and agricultural workers, are subject to separate minimum wage rates, which are described here. https://www.nj.gov/labor/lwdhome/press/2024/20241008_minwage.shtml

In New York state, the minimum wage for most workers in New York City, Long Island and Westchester increased to $16.50 an hour, up from $16.00 currently. In the rest of the state, the minimum wage for most employees will increase to $15.50 an hour from $15.  Tipped employees and home  health aides have different minimum wage rates which can be found here. https://dol.ny.gov/minimum-wage-0

EXPANDED RIGHTS FOR EMPLOYEES REGARDING PREGNANCY, PREGNANCY RELATED CONDITIONS, CHILDBIRTH AND BREASTFEEDING

State and federal laws have expanded and are set to further expand protections for female employees who are attempting to get pregnant, are pregnant, terminate pregnancies, give birth and are breast feeding.  Accordingly, employers should review reasonable accommodation and time off policies to ensure they are compliant with recent legal updates.

The federal Pregnant Worker Fairness Act (“PWFA”) went into effect in 2023, a law that memorialized employer obligations to provide reasonable accommodations to employees for “known limitations related to pregnancy, childbirth, or related medical conditions.” In June 2024, the Equal Employment Opportunity Commission’s implemented a final regulation 29 CFR Part 1636, https://www.federalregister.gov/documents/2024/04/19/2024-07527/implementation-of-the-pregnant-workers-fairness-act to carry out the PWFA.   The EEOC recently issued helpful guidance explaining key parts of the regulation: See https://www.eeoc.gov/wysk/what-you-should-know-about-pregnant-workers-fairness-act

Some notable points include the following:

Employer obligations:   Under the federal PWFA, private and public employers with 15 or more employees must provide a reasonable accommodation for the known limitations of an employee or applicant unless doing so would cause undue hardship (“significant difficulty or expense”).  The employer cannot: (1) require an employee to accept an accommodation that  has not been offered as part of the interactive process (dialogue) with the employee; (2) deny an employment opportunity to a qualified individual because they need a reasonable accommodation, (3) require an employee to take a leave of absence if another reasonable accommodation can be offered, or (4) retaliate against an employee or applicant for requesting or using such an accommodation.

Relationship with other laws: The PWFA does not replace other federal law, state or local laws that are more protective of workers’ rights.  For example, the New York Human Rights Law and New Jersey  Law Against Discrimination already require employers with fewer employees, namely four employees (NY’s law) and 1 employee (NJ’s law) to provide pregnant employees with reasonable accommodations absent an undue burden.

Eligibility for accommodation:  The PWFA requires an employer to provide reasonable accommodations to a qualified employee or applicant with a known limitation. A qualified employee or applicant is either: (1) a person who can perform the essential functions of the job with or without accommodation or (2) a person who cannot perform the essential functions of the job with or without accommodation temporarily, but could do so in the near future, and that inability can be reasonably accommodated.  Known limitations are those  “physical or mental conditions related to, affected by, or arising out of pregnancy childbirth or related medical conditions” that the employer has learned about form the employee or the employee’s representative.  Such limitation can be minor or episodic (such as  morning sickness or migraines).

Some examples that the EEOC cites in its Guidance as possible reasonable accommodations an employer should consider offering are:

  • Additional, longer, or more flexible breaks to drink water, eat, rest, or use the restroom;
  • Changing food or drink policies to allow for a water bottle or food;
  • Changing equipment, devices, or workstations, such as providing a stool to sit on, or a way to do work while standing;
  • Changing a uniform or dress code or providing safety equipment that fits;
  • Changing a work schedule, such as having shorter hours, part-time work, or a later start time;
  • Telework;
  • Temporary reassignment;
  • Temporary suspension of one or more essential functions of a job;
  • Leave for health care appointments;
  • Light duty or help with lifting or other manual labor; or
  • Leave to recover from childbirth or other medical conditions related to pregnancy or childbirth.

The Guidance also discusses what documentation employers can require employees to provide to support a request for accommodation, noting that employers should only do so if it is reasonable under the circumstances. According to the EEOC, it would NOT be reasonable for an employer to request supporting documentation for example, if a pregnant employee needs a larger uniform, if an employer knows a pregnant employee is experiencing morning sickness and asks for a later start time, if the employer’s normal policy on medical documentation would not require it, if a pregnant employee needs more frequent breaks to use the bathroom, to carry water with them, to drink or to stand while doing their job, or if a new mother needs accommodations to pump breast milk or nurse during working hours.   Under the circumstances when an employer is allowed to request documentation from the employee’s medical provider, the information sought should be limited to: confirming the physical or mental condition, that the condition is related to, affected by, or arising out of pregnancy, childbirth or related medical conditions, and identifying the adjustment at work needed due to the limitation.

In the regulation implementing the PWFA, the EEOC included “having or choosing not to have an abortion” in a nonexhaustive list of examples of potential “related medical conditions” covered by the PWFA  https://www.federalregister.gov/documents/2024/04/19/2024-07527/implementation-of-the-pregnant-workers-fairness-act.  The regulation states that the fact that such conditions are qualifying does not mean that an employer has to pay an employe’s travel expenses associated with having an abortion or that its health insurance plan must pay for any particular item, procedure, or treatment, including an abortion, but essentially means that the accommodation most likely to be provided is time off.  Despite this clarification, the inclusion of abortion in the list of eligible conditions for accommodations prompted four Catholic organizations and the states of Louisiana and Mississippi to sue to block that part of the regulation from going info effect.  That lawsuit was successful, and the day before the regulation went into effect, a federal district court in Louisiana blocked enforcement of that part of the rule against employers in Louisiana and Mississippi, which both have abortion bans, and the four Catholic organizations that sued to block the rule.  The ruling has no impact on other employers or on the rest of the regulation.

New York Implements New Time off and Break Time Benefits

Starting January 1, 2025,  all private sector New York employers must provide up to 20 hours of paid prenatal leave to eligible employees during any 52-week period.   Under the new Paid Prenatal Leave Law, which amends New York Labor Law Section 196-b, employees can take such leave for "health care services received by an employee during their pregnancy or related to such pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to the medical care, end of pregnancy care and fertility treatment.”  Time off must be provided to all employees regardless of their start date or whether they work full-time or part-time. The paid leave is paid at the employee’s regular rate of pay and can be taken in hourly increments.

An employee is entitled to 20 hours beginning on the date they first utilize the leave and ending 52 weeks later. For example, if an employee uses Paid Prenatal Leave for the first time on June 1st, 2025, they are entitled to 20 hours of Paid Prenatal Leave between June 1st, 2025, and May 31st, 2026.  Unused benefit hours do not carry over to the following 52-week period. An employer cannot ask an employee for information about their health or the nature of their prenatal visit as a condition of using Paid Prenatal Leave and cannot require an employee to submit medical records to use Paid Prenatal Leave.

An employee has the option to use NYS Sick Leave, Paid Prenatal Leave, or an existing employer leave policy to attend prenatal health care appointments. However, an employer cannot require an employee to use one leave type over another.

This  new law for pregnant employees comes on the heels of another New York law that went into effect last June, Labor Law Section 206-c, which requires all New York employers to provide employees up to 30 minutes of paid break time to express breast milk.  Such break time must be provided as often as the employee needs to express milk.

New Jersey Attorney General Focused on Reasonable Accommodations for Pregnancy, Childbirth and Related Conditions and Breastfeeding.

In December 2024, the New Jersey Attorney General issued guidance to clarify the comprehensive anti-discrimination protections available for employees who are pregnant, postpartum, breastfeeding, or lactating or who experience related medical conditions under the New Jersey Law Against Discrimination (LAD) as expanded by the New Jersey Pregnant Workers Fairness Act.  The guidance, https://www.njoag.gov/attorney-general-platkin-and-division-on-civil-rights-issue-guidance-on-workplace-accommodations-for-pregnant-postpartum-breastfeeding-and-lactating-employees/ provides a significant amount of information for employers and employees regarding prohibited conduct, employer obligations regarding reasonable accommodations,  and the requirements to treat employees who are pregnant, were recently pregnant or are breastfeeding equally as other employees who are not affected by pregnancy or breastfeeding.  The New Jersey Division on Civil Rights also has a section on its web site devoted to Pregnancy, Breastfeeding, and Reproductive Rights in New Jersey, see  https://www.njoag.gov/about/divisions-and-offices/division-on-civil-rights-home/pregnancy-breastfeeding-reproductive-rights-nj/   as well as additional policy briefs explaining the new guidance, including Workplace Accommodations for Breastfeeding and Lactation; What Employers Need to Know About Workplace Pregnancy Accommodations; and What Employees Need to Know About Workplace Pregnancy Accommodations. See https://www.njoag.gov/attorney-general-platkin-and-division-on-civil-rights-issue-guidance-on-workplace-accommodations-for-pregnant-postpartum-breastfeeding-and-lactating-employees/

GENDER-NEUTRAL DRESS CODES

In connection with a case against a restaurant, New Jersey’s Attorney General recently announced that the state deems dress codes that impose different standards on employees and customers based on gender or gender identity to be discriminatory under the New Jersey Law Against Discrimination (“NJLAD”). See https://www.njoag.gov/ag-platkin-announces-consent-order-with-restaurant-that-allegedly-discriminated-on-the-basis-of-gender-identity-in-violation-of-law-against-discrimination/  Accordingly, employers should review their dress code policies to ensure that they are gender neutral and do not have a disparate impact on any protected class under the NJLAD.