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Top 5 Employment Law Changes Coming Up on July 1, 2024

The business landscape is always changing, and that includes the laws that govern every aspect of your organization. At the start of 2024, many states, localities, and the federal government made changes to their regulations, affecting everything from sick days to employee classification to minimum wage increases and pay standards. And now that the midyear point has arrived, a few more changes are about to take effect in both local and national employment and labor law. 

Major Changes to State-Based Wage and Hour Laws

Starting July 1, 2024, Illinois businesses must ensure freelancers are paid no later than 30 days after they have delivered their agreed-upon product or service. Additionally, companies cannot demand that the freelancer accept less compensation than what is listed in the contract as a condition of timely payment by penalizing or intimidating that freelancer in any way. Those who engage in behaviors contrary to these new laws may face civil intervention from the Attorney General.

HR professionals at organizations throughout California also need to be prepared for a few changes regarding workers’ compensation license requirements. Currently, the law requires contractors applying for, reactivating, or renewing a license to provide proof of workers’ compensation insurance or self-insurance. Now, they will be required to certify their workers’ compensation classification codes for the highest estimated payroll.

The new law ensures organizations have the appropriate coverage for the type of work being performed, and it will offer better protection to employees in the case of a work-related accident.

Updates to Chicago’s Current Leave Regulations

As several states and municipalities look to give employees peace of mind in taking time away from their jobs, Chicago is following suit. The city has issued a final rule, effective July 1, 2024, regarding its new Paid Sick and Safe Leave Law, which affects paid leave accrual and use.

According to the law, employers and HR professionals should first establish a consecutive 12-month leave accrual period. Afterward, the organization must do the following:

  • Notify employees of the availability of paid leave hours at the beginning of those 12 months if the organization decides to front-load the time 
  • Provide written notice of the policy to new hires upon the start of employment
  • Provide an annual notice via paper or electronic means with a paycheck issued within 30 days of July 1st
  • Provide at least five calendar days of written notice to employees before implementing changes to the paid leave policy
  • Provide at least 14 days advance written notice for policy changes affecting any employee’s right to final compensation
  • Provide notification policies surrounding leave availability and use

If you wish to front-load at least 40 hours of paid leave for employees at the beginning of the 12-month accrual period, you will not be required to allow employees to carry over unused leave unless it’s unused sick leave. Additionally, employers can restrict employees’ use of paid leave or sick leave to the regular work week and deny paid leave to maintain business continuity. 

An Overhaul of the FLSA’s Overtime Rules

The Fair Labor Standards Act (FLSA), which governs issues surrounding minimum wage and overtime pay on the federal level, is also undergoing some significant changes.

Typically, white-collar employees are considered exempt from overtime pay requirements if they meet certain criteria. Currently, employees must make at least $684 per week ($35,568 per year) to be considered exempt. The parameters for the FLSA’s salary level test will increase to $844/week ($43,888/year) on July 1, 2024. The threshold will rise again to $1,128/week ($58,656/year) on January 1, 2025.

Additionally, the threshold for a highly compensated employee (another test used to determine exemption status) will increase from $107,432/year to $132,964/year and then to $151,164 per year on January 1, 2025.

Altogether, these increases mean that employees making at least that much and regularly performing non-manual administrative, executive, professional, outside sales, or computer work will automatically be considered exempt from overtime pay requirements. Data from the U.S. Bureau of Labor Statistics will be used to update these thresholds every three years, with the first update occurring on July 1, 2027.

To prepare for these changes, HR professionals should review each employee’s current pay and exemption status. They will likely need to make budget adjustments to account for a pay raise or overtime pay or adjust their overtime policies to help keep payroll costs within an acceptable range.

Understanding the California Workplace Violence Prevention Plan

In an effort to curb workplace violence, California is introducing a new law requiring that employers develop and enforce effective violence prevention policies and create a Workplace Violence Prevention Plan (you can find a model Plan here as a starting point) effective July 1, 2024. In implementing this plan, HR professionals must keep detailed logs of all violent incidents and any follow-up investigations. They must also allow an employee representative to petition for a temporary workplace violence restraining order on behalf of another employee.

Additionally, HR must ensure staff members know how to call for help from law enforcement or designated staff in the event of a violent incident, how to report such violence, how their concerns will be addressed, and their organization’s official procedures for responding to violent emergencies.

Maintaining Current Legal Knowledge Is Key to HR Success

Reducing compliance risks and building a positive workplace culture means HR professionals must stay up to date with changes in employment law. One way to do so is by signing up for the Society for Human Resource Management (SHRM)’s Workplace Compliance Newsletter. You’ll receive summaries of legal, legislative, and regulatory news each Friday. You can also check your favorite employment law blogs and websites for major updates. When you use VirgilHR’s technology, our compliance calendar will automatically bring you up-to-date on legal changes that affect your organization. Our customizable tool allows you to quickly and easily find the information you need without having to scroll the whole calendar and create tasks based on new legal updates. Request a demo today and see the difference VirgilHR can make in your organization.