Law

Employment Law Updates: What Should Business Owners Watch For?

December 15, 2020

Employment law updates are arguably the most important thing to watch for as a business owner. Learn about what we know so far.

employment law updates
A man buying a newspaper from a little boy.

We’re all surely ready to leave the chaos of 2020 behind. With that being said, don’t get in such a hurry to leave it behind that you forget to watch for what’s coming in 2021. Mainly, any employment law updates that are pending or still waiting to pass. While updates are still trickling in, we have a general idea of what will change.

In this article, we’ll take a look at which changes have gone through and when they’ll be effective. We’ll also take a look at what’s changing in the world of employee paperwork and state minimum wages. While standards and regulations can change across industries, we’ll be taking a look at general changes rather than industry-specific. With that being said, it’s important to keep up with your own industry to ensure you’re in compliance.

As we’ve mentioned, not everything is finalized yet. So, you may be asking yourself, when will the final employment law updates come in?

When Will Everything Be Final?

Most changes are in effect by the first of January. However, this doesn’t mean they’re final for the entire year of 2021. Employment law updates can adjust and change, even after approval for the new year. This is also true of the IRS’s announcements. Just because it’s marked “final” doesn’t mean it won’t be adjusted further. For example, just a few years ago, HSA contribution limits were adjusted in May.

Minimum wage updates on the other hand are usually determined much more in advance. For example, some states have had a plan in place to reach a certain minimum wage amount within a set number of years. While this isn’t always the case, you’ll usually know when an update to minimum wage is coming.

As we’ve already mentioned, you should still track updates within your industry. If you have an HR department or manager, this would be something they’re notified of and up-to-date on. Let’s start by taking a look at some state-specific employment law updates.

State Specific Employment Law Updates

While there are many state updates, we’ll look at four states specifically – the states where Journey operates – Arizona, Colorado, New York, and Oregon. Let’s start with the updates to Arizona’s employment laws for 2021.

Blocks spelling out "wage" and a woman's hand holding up an increase arrow. some employment law updates include minimum wage increases.

Arizona

Arizona’s minimum wage will increase in 2021 by 15 cents, to $12.15 per hour. They’ve also made adjustments to city minimum wage. In Flagstaff, the minimum wage for 2020 was still higher than the rest of Arizona, at $13.00 per hour. In 2021, it jumps to $15.00 an hour, adjusting for the cost of living.

Colorado

Colorado’s minimum wage will increase from $12.00 to $12.32. Like Arizona, Colorado also has a higher minimum wage for increased cost of living. In Denver, 2021’s minimum wage will increase to $14.77. Aside from these changes to minimum wage, Colorado has some additional employment law updates. All of these updates are effective as of January 1, 2021.

  • Unemployment compensation and eligibility: If an employee must leave work due to domestic violence, they’re still eligible for unemployment benefits. This update to SB 20-170 also expands the definition of “family members.”
  • Pay equity and discrimination: This act further prohibits wage discrimination based on sex and gender identity. Starting January 1, employers are also no longer allowed to ask an applicant for their salary history or forbid employees to discuss wages.
  • Paid Leave: The timeframe on act SB 20-205 is a little different, as it only applies to employers with 16 or more employees until January 1, 2022. Then, it will apply to all employers. Employees will accrue one hour paid sick and safe leave for every 30 hours worked, with a maximum of 48 hours each year.
employment law updates include paid leave for sick and safe leave in Colorado.

Now let’s take a look at the employment law updates in a state across the country, New York.

Related:  American Health Care Act of 2017

New York

New York’s minimum wage updates are a bit more complex than those in Arizona and Colorado. They are also going into effect a day earlier. New York (Non-NYC Fast Food) will see a minimum wage increase to $14.50 beginning a day early on December 31, 2020. They can expect another increase effective July 1, 2021 to $15.00.

Nassau, Suffolk, and Westchester Counties have a minimum wage increase effective on the 31st as well, to $14.00. The rest of New York will have an increase of 70 cents, raising the minimum wage to $12.50. New York will also see another small employment law update.

  • Wage Payment and Pay Stubs: Starting April 5, 2021, SB 2328 allows employees to receive their direct deposit confirmation electronically instead of by paper.

Oregon

Like New York, Oregon also has a different approach to minimum wage than our previously mentioned states. Their start dates are halfway through the year though, starting on July 1, 2021. In Urban Oregon, the minimum wage is increasing from $13.00 to $14.00.

Nonurban Oregon will have a smaller increase of 50 cents for a minimum wage of $12.00. Finally, general Oregon’s minimum wage increase will be from $12.00 to $12.75. Oregon also has an update to their privacy laws.

  • Privacy and surveillance: Portland Ord. No. 190114 prohibits the use of facial recognition technology in private entity’s surveillance in public accommodations.

We’ve only covered a handful of state’s updates, and it’s always a good idea to stay up-to-date on your state’s laws. Read this article by Littler for a comprehensive list of states and their employment law updates. Now that we’ve covered state specific updates, let’s go over updates to the Form W-4.

Additional Minimum Wage Updates

There are some additional states aside from those mentioned above that are increasing their minimum wage in 2021.

Alaska $10.34
Arkansas $11.00 
California  $14.00* 
Connecticut $13.00 (effective 8/1/21) 
Florida $10.00 (effective 9/30/21)
Illinois $11.00 
Maine $12.15 
Maryland $11.75*
Massachusetts $13.50 
Michigan $9.87
Minnesota $10.08*
Missouri $10.30 
Montana $8.75 
Nevada $8.75 (effective 7/1/21)*
New Jersey $12.00*
New Mexico $10.50 
Ohio $8.80 
Rhode Island $11.50 
South Dakota $9.45 
Vermont $11.75 
Washington $13.69 
*Special rules may apply, check your state’s Department of Labor website for specifics.

2021 Changes to Form W-4

This year’s overhaul of the Form W-4 was the first in about 30 years. So, it’s no surprise that people panicked initially. Nobody likes change, especially changes you don’t understand. Comparatively, 2021’s updates are much easier to swallow, so no need to panic this time.

Related:  Update: 2021 Minimum Wage by State

The new draft of 2021’s Form W-4 is up on the IRS website, but has been a draft since December 3. While you cannot file or officially use this draft for filing, you can use it to learn from. HR managers can familiarize themselves with the draft until the final is released. This way, they’re slightly ahead of the learning curve.

Like last year’s updates, theses changes were made to streamline the W-4 process and make it easier on employees. The overall goal is for employees to “break even.” Meaning they don’t owe money or receive money after filing their taxes.

These changes may feel like a nuisance now with everything else going on, but this update will be easier and more beneficial for everyone in the next few years. Unless the IRS makes additional adjustments. Now that we’ve discussed why there were changes, let’s take a peek at what those changes are.

Marital Status

The first major change to the W-4 is on the marital status. The status of married or single and the number of dependents you claim is a concept many Americans are used to. However, starting on 2021’s version of the W-4, you’ll notice a change in verbiage. While they removed this in 2020’s version, it’s been re-added with different phrasing.

You’ll remember the old options were married, single, or married filing as single. Now, taxpayers choose from:

  • Single or married filing separately
  • Married filing jointly (or qualified widower)
  • Head of household

Just like in 2020, employers aren’t required to have every employee fill out a new W-4 for 2021. If the allowances are the same, employers are allowed to keep the employee’s previous version on file. However, if there are any changes, it’s advised employees fill out a new W-4.

Option to Withhold by Marital Status Only

This is a new option for employees. The 2021 W-4 will have an option to only have your income tax withheld based only on marital status. If employees choose this option, it’s the easiest in terms of paperwork. Employees only fill out parts 1 and 5, which includes: name, social security number, address, and filing status. Then, they sign and date the form and turn it in to you.

Keep Watching for Employment Law Updates

In short, employment law updates can happen at any time. However, they’re more common at the end and the start of new years, so keep your eyes peeled for additional updates. Sign up for newsletters, alerts, and updates through HR blogs to easily stay up-to-date. Hopefully what we’ve shared will start you off on the right track for 2021.


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