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New York employers now have a big “to do” item for 2025. Starting January 1, 2025, New York employers will be required to provide employees with 20 hours of paid prenatal personal leave (PPPL) during any 52‑week calendar period in addition to paid sick and safe leave (PSSL). New York is the first state in the US to require employers to provide such leave.

The new obligation results from Governor Hochul’s FY 2025 executive budget bill (A 8805), which passed April 20, 2024 and (among other things) amends New York Labor Law § 196-b (New York state’s paid sick and safe leave law). The new law does not change an employee’s entitlement to other leaves such as PSSL (which is 40 or 56 hours per year, depending on the size of the employer) and New York Paid Family Leave (which provides eligible employees job-protected, paid time off for reasons including to bond with a newborn, adopted or fostered child).

Breaking down PPPL

Who does this apply to?

All employers in New York are required to provide PPPL to all pregnant employees.

What type of leave is covered by PPPL?

PPPL is leave taken 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 pregnancy

Does PPPL have to accrue before employees can take PPPL?

No. Eligible employees can take all 20 hours of PPPL they are entitled to for the 52-week period starting the effective date of the new law–without waiting for PPPL to accrue.

Are there certain increments for taking leave?

Employees are permitted to take PPPL in hourly increments.

How is PPPL paid?

PPPL must be paid in hourly installments. Employers must pay employees for PPPL at the employee’s regular rate of pay, or the applicable minimum wage–whichever is greater.Continue Reading New York Employers’ New “To Do” Item for 2025: Provide Paid Prenatal Personal Leave Starting January 1

On Tuesday this week, the Federal Trade Commission (FTC) issued its highly anticipated final rule on noncompetes, imposing a near-total ban on worker noncompetes in the United States. Barring injunctive relief from legal challenges (which have already started), the rule will take effect 120 days from publication in the federal register.

Interestingly, the rule exempts noncompete covenants entered into pursuant to a bona fide sale of a business. While “bona fide” is not defined in the final rule, the Supplementary Information for the rule explains that the FTC considered but rejected percentage and dollar minimum thresholds for the sale of business exception to weed out “exploitative and coercive” noncompetes and clarified that excepted noncompetes must be given “pursuant to a bona fide sale.” The Supplementary Information further explains that the FTC considers a bona fide sale to be one that is made between two independent parties at arm’s length, and in which the seller has a reasonable opportunity to negotiate the terms of the sale. In contrast, the FTC specifically calls out as problematic “springing noncompetes,” which apply to employees in the event of a sale and mandatory stock redemption or repurchase programs because the employee has no goodwill to exchange in the sale for the noncompete and no meaningful opportunity to negotiate at the time of contracting.

Nevertheless, the bona fide sale exception is broad and preserves the status quo by allowing buyers in M&A transactions to obtain noncompetes from individual sellers in circumstances where such noncompetes are otherwise permitted currently. While the pending and anticipated legal challenges to the rule are significant and place the entire rule in jeopardy, the sale of business exception is not likely to be narrowed because of these challenges.

So, what does this new regime mean for M&A?

What Type of Noncompetes Are Impacted?

The Supplementary Information confirms that the new rule does not apply to B2B noncompetes or nonsolicits. Instead, the focus of the rule is noncompetes with workers that limit their ability to work for others. So the rule does not impact current B2B agreements.

Second, the FTC repeatedly makes the point that noncompetes must meet existing state and federal law restrictions (e.g., reasonable in scope and duration; limited to the goodwill to be acquired, etc.) to be enforceable, even if they otherwise fall within the sale of business exception in the new rule. This is the case because the FTC rule creates a new floor for noncompetes by preempting more lax state rules, but it does not preempt more stringent state laws or federal antitrust restrictions.Continue Reading Still Going Strong: M&A Noncompetes and the FTC’s Final Rule on Noncompetes

Employers have been eagerly awaiting the EEOC’s Final Rule to implement the Pregnant Worker Fairness Act, and it’s (finally!) here. On April 15, the EEOC issued the Final Rule, which largely follows the proposed rule (we blogged about the proposed rule here, and about the PWFA here). The Final Rule was published in the Federal Register on April 19, 2024 and will take effect on June 18, 2024. There are no major surprises for employers, but the Final Rule has arrived with a bit of controversy.Continue Reading Special Delivery: The PWFA Final Rule Has Arrived

On April 23, the Federal Trade Commission voted 3-2 to issue its final rule on noncompetes, imposing a near-total ban on all employer-employee noncompetes in the US. Barring challenges (the first lawsuits have already been filed), the rule would become effective 120 days from publication.

The rule will be a game-changer for companies operating in the US if it takes effect as issued.

Breaking it Down

What does the rule do?

With only a few exceptions, the FTC’s now-final rule declares employer-employee noncompete clauses an “unfair method of competition,” and a violation of Section 5 of the FTC Act. The rule targets both formal noncompete clauses and “functional noncompete” clauses that have the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer. This can include broad nondisclosure agreements that have the effect of precluding workers from seeking employment opportunities in the same field.Continue Reading Breaking News: The FTC Bans Nearly All Employer-Employee Noncompetes Except Those Given as Part of a ‘Bona Fide’ Sale of Business

The Department of Labor’s “new” rule for classifying workers as employees or independent contractors under the Fair Labor Standards Act took effect March 11, 2024. The DOL’s Final Rule returns employers to a familiar pre-Trump administration totality of the circumstances test that focuses on the “economic realities” of the worker’s situation. The practical impact is that it is now harder for businesses to classify workers as independent contractors, and it will likely increase federal wage and hour claims.

There are mounting legal challenges to the Final Rule contesting the DOL’s rulemaking authority. However, to date, none of the suits have been successful at blocking implementation of the Final Rule. So, for now, it stands.

Practice pointer: different legal tests for different laws

Employers new to the US are often baffled to learn that no single test exists to evaluate independent contractor status for all purposes. This means compliance is complicated since different tests may apply depending on the context. And yes, this also means that it’s feasible for a worker to be an independent contractor for some purposes and an employee for others (such as under state and federal law, for example). Continue reading for a summary of the key tests that come up most often for US multinationals.Continue Reading New DOL Rule Makes it Harder to Classify Workers as Independent Contractors (Plus a Quick Recap of the Key Misclassification Standards Across the US)

You’re not alone in wondering where the Equal Employment Opportunity Commission’s final regulations to implement the Pregnant Workers Fairness Act are. In fact, they are well past their due date.

How it started

The PWFA became effective on June 27, 2023. In August 2023, the EEOC published proposed regulations to implement the PWFA. (We outlined the proposed regulations in our blog here, and about the PWFA here). The public comment period for the proposed regulations closed October 10, 2023, and the proposed regulations were delivered to the Office of Information and Regulatory Affairs (“OIRA”) on December 27, 2023 for review.

How it is going

However, to date, no final regulations have been issued, despite the PWFA’s requirement that the EEOC issue regulations by December 29, 2023. The regulations, once finalized, will provide clarity for employers implementing policies and practices to comply with the PWFA. For instance, the proposed regulations outline a nonexhaustive list of what the EEOC considers potential accommodations under the PWFA, including job restructuring and part-time or modified work schedules.

However, even without final regulations in place, employers are required to meet the PWFA’s mandates. The proposed regulations can still be used to offer insight into how the EEOC believes the PWFA should be interpreted.Continue Reading Pregnant Pause: The EEOC’s Delay In Issuing Final Regs For The PWFA Should Not Delay Compliance

As a consistent trend-setter in passing employee-friendly legislation, California has enacted the country’s first workplace violence prevention safety requirements applicable to nearly all employers in the state.

SB 553 requires California employers to adopt a comprehensive workplace violence prevention plan, train employees on workplace violence, and begin logging incidents by July 1, 2024.

Detailed Requirements for a Written Plan

The workplace violence prevention plan must be written, available and easily accessible to employees (as well as authorized employee representatives and Cal/OSHA representatives).Continue Reading California Employers: Prepare Your Workplace Violence Prevention Plan (Deadline In T-Minus 3 Months)

The new year brought some good news for California employers. On January 1, 2024, U.S. District Court Judge Kimberly Mueller issued a decision permanently enjoining California state officials from enforcing AB 51, the contested law that sought to prohibit employers from “forcing” job applicants or employees to enter into pre-dispute employment arbitration agreements covering certain discrimination and retaliation claims. The permanent injunction reaffirmed the ability of employers to mandate arbitration for most employment disputes.

This decision comes less than a year after the Ninth Circuit found that the Federal Arbitration Act (FAA) preempts AB 51 in Chamber of Commerce of the United States v. Bonta. As noted in our blog post on the Bonta decision, the Ninth Circuit ultimately upheld a temporary injunction against AB 51, allowing California employers to continue to use employment arbitration agreements while the matter was litigated, and which—given Judge Mueller’s permanent injunction—now can continue indefinitely.

The Lead Up: Recap of the AB 51 Litigation Battle

Here is a quick summary of the AB 51 litigation leading up to the January 1, 2024 permanent injunction:

  • In December 2019, Judge Mueller issued a temporary restraining order, prohibiting California from enforcing AB 51.
  • In September 2021, the Ninth Circuit struck down Judge Mueller’s decision to temporarily restrain California from enforcing AB 51, holding that AB 51 was not largely preempted by the FAA.
  • In August 2022, the Ninth Circuit withdrew its September 2021 decision and voted to take another look at the case through a panel rehearing.
  • In February 2023, the Ninth Circuit, backtracking on their September 2021 decision, held that AB 51 is preempted by the FAA because the deterring penalties that AB 51 imposes on employers is antithetical to the FAA’s policy of favoring arbitration agreements.

Continue Reading End of the AB 51 Saga: California Employers Can and Should Continue Using Arbitration Agreements

Illinois employers navigated an avalanche of new laws in 2023, with more on the horizon in 2024 (and even 2025). New paid leave obligations for Illinois (and Chicago and Cook County) employers are a significant change, and additional developments expand employer liability in some circumstances where individuals are victims of gender-related violence. There are also new obligations for employers who use temporary employees, and increased protections for striking workers–not to mention a soon-to-be requirement for employers to include pay scale and benefits information in job postings starting January 1, 2025.

Here are key updates that Illinois employers should be aware of for 2024–and beyond.

1. New paid leave laws in Illinois, Chicago and Cook County

Employers in Illinois, Chicago and Cook County have new paid leave obligations for 2024 under three new laws:

  • The Illinois Paid Leave for All Workers Act (PLAWA) (effective January 1, 2024) requires Illinois employers to provide most employees with a minimum of 40 hours of paid leave per year to be used for any reason at all–not just for sick leave.
  • The Cook County Paid Leave Ordinance (effective December 31, 2023, the sunset date of the prior Cook County Earned Sick Leave Ordinance) covers employees who work in Cook County and largely mirrors the PLAWA. The Cook County Commission on Human Rights will begin enforcement of the paid leave Ordinance on February 1, 2024.
  • The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (effective July 1, 2024) will require covered employers to provide eligible employees 40 hours of paid sick leave and 40 hours of paid leave (the latter usable for any reason) per 12-month accrual period, for a total entitlement of up to 80 hours of PTO per 12-month period.

Importantly, under both the PLAWA and the Cook County Paid Leave Ordinance:

  • Eligible employees earn 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours in a 12-month period (with exempt employees presumed to work 40 hours per workweek for accrual purposes, but leave accrues based on their regular workweek if their regular workweek is less than 40 hours)
  • Though unused accrued paid leave from one 12-month period can be carried over to the next, employers can cap the use of paid leave in one 12-month period to 40 hours
  • Frontloading is permitted, and employers who frontload 40 hours at the beginning of the 12-month period are not required to carry over unused accrued paid leave
  • Employers cannot require employees to provide a reason they are using paid leave, or any documentation or certification as proof or in support of paid leave

The Chicago Paid Leave Ordinance diverges from the PLAWA and the Cook County Ordinance in several ways, including:

  • Covered employees will accrue one hour of paid sick leave and one hour of paid leave for every 35 hours worked-five hours less than what is required to accrue an hour of paid leave under the PLAWA or Cook County Ordinance
  • Employees may carryover up to 80 hours of paid sick leave and up to 16 hours of paid leave from one 12-month accrual period to the next
  • Employers may frontload 40 hours of paid sick leave and 40 hours of paid leave on the first day of the 12-month accrual period. Frontloaded paid leave does not carry over from one 12-month period to the next (unless the employer prevents the employee from having meaningful access to their PTO), but up to 80 hours of unused paid sick leave does
  • Employers with more than 50 employees in Chicago are required to pay the employee the monetary equivalent of unused accrued paid leave when an employee separates from the employer or transfers outside of the City of Chicago (see chart below for specifics)
  • Unlike in the PLAWA or Cook County Ordinance, unlimited PTO is specifically addressed in the Chicago Paid Leave Ordinance (so employers with unlimited PTO policies should review the Ordinance closely)

Continue Reading A Legislative Snowstorm: Key 2024 Updates for Illinois Employers Include a Number of New Leave Obligations and More