Tracking and complying with federal, state, and local wage and hour requirements has long been top of mind for employer as wage and hour liability continues to be one of the most expense employment law risks. Indeed, in 2022, the 10 largest reported settlements for wage and hour actions totaled $574 million.
Currently, in addition to federal rulemaking and enforcement activities, state and local legislatures and administrative agencies remain extremely active in the wage and hour space, resulting in an increasingly complex compliance environment. Given the intricacies here, we help companies identify the areas of wage and hour law that are most likely to trigger liability.
In 2024, among other things, we recommend that companies invest in compliance related to:
- Minimum wage changes | Over 20 state and local jurisdictions increased minimum wage requirements effective January 1, 2024, with more to follow. Some states are also eliminating tip credits (e.g. Alaska, California, DC, Minnesota, Montana, Nevada, Oregon and Washington) and subminimum wage categories and imposing new or increased salary thresholds.
- A tsunami of pay transparency laws | As pay disclosure in job postings requirements continue to gain traction (e.g. in California, Colorado, Connecticut, DC, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island and Washington) employers should understand how this impacts their compensation and recruitment policies, including how to address employee questions when pay information is disclosed for open roles. Towards the end of 2023, a flurry of class actions were filed in Washington alleging violations of the state’s new pay transparency law. We’re tracking this litigation and will report significant updates.
- On a related note, we always recommend that companies conduct periodic pay equity audits with counsel to protect against unexplained disparities that may encourage discrimination suits.
- Also, for a quick and easy way to stay on top of pay transparency obligations globally, we offer a fixed fee Global Pay Equity Compliance Compendium that monitors the legal pay equity requirements and forthcoming developments across 70+ jurisdictions (of which over 40 currently have transparency or reporting requirements). Please contact a member of our team for more information.
- Comparable pay for temporary workers | In some jurisdictions (e.g. Illinois and New Jersey), day and temporary workers have significant new rights and protections, including comparable pay requirements. It’s important for companies to keep tabs on their temporary worker utilization and the compliance obligations of employers and temporary labor service providers.
- DOL enforcement and rulemaking | Employers should continue to monitor federal DOL priorities, including:
- Investigation and prosecution of off-the-clock claims and child labor violations and
- Rulemaking regarding minimum wage and overtime pay exemptions for executive, administrative, and professional employees.
For wage and hour guidance or defense, please contact a member of our team.