In 2018, we saw a flurry of new state laws affecting employers. Many of these changes are scheduled to take effect sometime in 2019. We recommend that our clients take a closer look at their policies, employment agreements, and handbooks to be sure they reflect the current state of the law. For New Year’s 2019, we recommend the following resolutions:
1. Update Non-Competes
In 2018, Massachusetts enacted sweeping non-compete reform . The new law grandfathered in old non-competes, but any new non-competes entered into after October 1, 2018 must meet the following criteria:
- Maximum duration of 1 year;
- Geographic limitation linked to areas where the employee works or has influence during their last two years of employment;
- Provide additional compensation beyond wages, either in the form of “garden leave” of at least 50% of the employee’s salary or other “mutually agreed-upon compensation”;
- No non-competes for hourly employees, student interns, temporary employees, and anyone younger than 18; and
- No non-competes for individuals terminated without cause.
Update any offer letters, confidentiality agreements, or other IP agreements that include non-competes to meet the requirements of the new law.
We also recommend that all employers audit their existing non-competes to make sure they would be enforceable. Even if these old agreements are grandfathered in, we foresee Massachusetts courts taking a critical eye to any non-compete that would not meet the new criteria. Additionally, courts are wary of enforcing non-competes for employees who have had their responsibilities or compensation substantially changed since signing the non-compete. There are other options for employers to protect their intellectual property – including non-solicits and confidentiality agreements – that may provide better protection than outdated non-competes. If you have any questions about updating your agreements or other strategies for protecting your company’s intellectual property, please give us a call.
2. Update Disability Policies to Include Pregnancy Discrimination
The Massachusetts Pregnant Workers Fairness Act took effect on April 1, 2018. The new law prohibits discrimination based on pregnancy, pregnancy-related conditions, and breastfeeding. Employers must provide reasonable accommodations to pregnant and breastfeeding employees, which may include more frequent breaks, time off, modification of equipment or seating, job restructuring, and access to private, non-bathroom space for expressing breast milk.
If you have not already done so, we recommend updating your employee handbook, written policies, and employment posting to reflect the new law. Educate managers and supervisory employees on the types of accommodations available for pregnant employees.
3. Implement Sexual Harassment Training
California and New York both adopted new sexual harassment training requirements in 2018. In New York State, all employers are now required to provide annual sexual harassment training. New York City is imposing additional requirements effective April 2019. For employers with at least 15 employees in the city, the training must include a discussion of bystander intervention, new employees must be trained within 90 days, and employers must maintain signed acknowledgement forms for 3 years.
In California, employers with at least 5 employees (down from 50 employees) must provide sexual harassment training every two years. Employers have until January 1, 2020 to provide the required training, which must include at least two hours of prevention training for supervisors and at least one hour of prevention training to all other employees. Employees must be trained within 6 months of their start date.
Although these laws are limited to New York and California, given the recent increase in cases and public attention brought by the #metoo movement, we strongly advise all our clients to implement annual or biannual sexual harassment/non-discrimination training.
4. Prepare for Massachusetts Paid Family Leave
In 2018, Massachusetts enacted paid family and medical leave. Although employees cannot start using paid family and medical leave until 2021, the Commonwealth will begin collecting payroll taxes to build a reserve starting in July 2019. The payroll tax will be 0.63%, divided equally between workers and their employers. Companies with fewer than 25 employees are exempt from the employer portion of the payroll tax.
The Commonwealth is scheduled to release additional guidance for employers in the early spring. We will keep our clients updated once this guidance is published.
5. Increase Minimum Wage Employees to $12 per hour
As a reminder, the minimum wage in Massachusetts is now $12 per hour. Be sure to update your payroll for all minimum wage employees.
Finally, while it was an exciting year for all of us in the employment law field, with many new laws being passed, we continue to see litigation that could be avoided with good human resources practices. Employers would be wise to look over their handbooks, policies, offer letters, separation agreements, and restrictive covenant agreement forms. Moreover, employers of all sizes need to ensure that they have consistent and careful recordkeeping and documentation systems in place. An ounce of prevention goes a long way to avoid expensive litigation.
As always, please contact us if you have any questions about these new laws or would like training on any of these topics.