As we enter July, businesses must be prepared for a series of significant changes in employment compliance laws. July 1 marks the beginning of several new regulations and requirements that will impact HR practices, state-specific laws, and workplace safety standards. Staying informed and proactive is crucial for ensuring employment compliance and maintaining a smooth operational flow. Here’s a comprehensive overview of what to expect and how to prepare.
Key Changes Effective July
1. Federal Overtime Rule Changes
Starting July 1, 2024, the salary threshold for white-collar exemptions under the Fair Labor Standards Act (FLSA) will increase. Salaried workers earning less than $844 per week (approximately $43,888 annually) will be eligible for overtime pay. This threshold will rise again on January 1, 2025, to $1,128 per week (about $58,656 annually). Additionally, the salary threshold for highly compensated employees will increase from $107,432 to $132,964 annually. These changes aim to extend overtime protections to more workers and ensure fair compensation for extended work hours.
2. California’s Workplace Safety Prevention Plan
California businesses should be particularly vigilant about the new requirement for a Workplace Safety Prevention Plan. This regulation mandates that employers implement comprehensive safety measures to protect employees from potential hazards in the workplace. Key elements of the plan include:
- Hazard Identification and Assessment: Regularly evaluating the workplace to identify potential safety risks.
- Employee Training: Providing employees with proper training on safety protocols and emergency procedures.
- Incident Reporting and Investigation: Establishing clear procedures for reporting and investigating workplace incidents.
Non-compliance with these requirements can result in hefty fines and legal consequences, making it essential for California employers to update their safety protocols promptly.
3. Family and Paid Leave Changes Nationwide
Several states, including Oregon and Washington, are updating their family and paid leave laws effective July 1, 2024. These changes aim to streamline the administration of employee leaves for reasons such as baby bonding and serious health conditions. For example, Oregon’s new regulations under the Paid Leave Oregon (PLO) program will allow employees to use employer-offered paid leave accruals to supplement PLO benefits, ensuring full wage replacement during leave. Similarly, Washington has updated its Paid Family Medical Leave program, adjusting the duties test and salary basis for exempt employees.
4. Pay Transparency and Cannabis Testing
Pay transparency laws are becoming more prevalent. Starting June 30, 2024, Washington, D.C., will require employers to disclose salary ranges in job postings, joining states like Colorado, California, and New York. Additionally, California and Washington have introduced new laws restricting pre-employment cannabis testing, focusing on protecting applicants and employees from discrimination based on off-duty marijuana use.
5. State-Mandated Retirement Plans
Several states have implemented or will be implementing mandatory retirement savings programs to help employees save for retirement. For instance:
- Colorado: Employers with five or more employees must facilitate the Colorado SecureSavings program by May 15, 2024.
- Oregon: OregonSaves requires all employers to offer a qualified retirement plan by July 31, 2024.
- Maryland: MarylandSaves mandates that businesses with automatic payroll processing enroll in a payroll-deducted savings program.
- Hawaii: The Hawaii Retirement Savings Program, requiring automatic enrollment in a Roth IRA, is set to be operational by July 1, 2024.
While state-mandated plans provide a baseline retirement savings option, Tilson’s 401(k) plan offers significant advantages by easing the administrative burden and providing comprehensive support to meet due diligence obligations, which a state plan cannot do. Tilson saves time and expense by maintaining employee payroll data, ensures compliance with Department of Labor requirements and required government filings, as well as the annual independent audit, providing comprehensive enrollment support and participant education.
Mid-Year Tax Settings Checkup
July is also an opportune time for a mid-year checkup on employees’ tax settings. Changes in personal circumstances, such as marriage, the birth of a child, or changes in dependent status, can significantly impact tax withholdings. Encouraging employees to review and update their tax settings (found in their online HR portal) can help avoid surprises during tax season and ensure accurate withholdings.
Action Steps for Employers:
- Review Payroll Systems: Ensure that payroll systems are updated to reflect the new salary thresholds and tax settings.
- Update HR Policies: Align HR policies with state-specific employment law changes and communicate these updates to employees.
- Enhance Workplace Safety: For California businesses, prioritize the development and implementation of a Workplace Safety Prevention Plan.
- Employee Communication: Regularly communicate with employees about any changes in laws and policies that may affect them.
The Value of Partnering with a PEO
In the ever-changing landscape of employment laws, partnering with a Professional Employer Organization (PEO) can be a game-changer for businesses. PEOs provide comprehensive HR solutions that help businesses navigate complex regulatory environments and mitigate employment compliance risks.
Why Partner with a PEO?
1. Expertise in Compliance: PEOs stay up-to-date with the latest changes in employment laws and regulations. This expertise ensures that your business remains compliant, reducing the risk of fines and legal issues.
2. Streamlined HR Processes: PEOs handle payroll, benefits administration, and other HR functions, allowing businesses to focus on their core operations. This streamlining can lead to increased efficiency and cost savings.
3. Employee Benefits: PEOs often provide access to better employee benefits packages, which can help attract and retain top talent. These packages are typically more competitive than what small to medium-sized businesses can offer on their own.
4. Scalability: As your business grows, a PEO can scale its services to meet your evolving needs. This flexibility ensures that your HR infrastructure can support your business expansion without added stress.
5. Technology and Resources: PEOs provide modern HR technology and resources to streamline processes and improve the employee experience. These tools can automate tasks, offer self-service options for employees, and provide valuable insights through data analytics.
Partnering with a PEO like Tilson can provide your business with the support and resources needed to navigate the complexities of employment laws and focus on growth and success.
Conclusion
July brings a wave of employment compliance law changes that businesses must navigate carefully. By staying informed and proactive, employers can ensure compliance, minimize legal risks, and create a safer, more efficient workplace. If you need assistance with understanding and implementing these changes, our team at Tilson HR is here to help.
Download our toolkit for Updating Employee Handbooks here.
Stay compliant, stay informed, and keep your business thriving this July and beyond.
For more information or personalized assistance, contact Tilson HR today. Our experts are ready to help you navigate these changes seamlessly. With a focus on helping businesses stay compliant with ever-evolving laws and regulations, we provide tailored support to meet your unique needs. Whether you’re looking for assistance with payroll management, employee benefits, HR or risk management, Tilson has you covered.
