Quick Look: The only constant in life is change—and that’s certainly true of all the new HR-related and employment laws taking effect this year. From evolving COVID-19 mandates to other legal challenges surrounding salary transparency and minimum wage updates, it may be time for SMBs to brush up on the latest regulatory requirements and work with their broker or PEO partner to revise policies as needed.
One of the most important HR responsibilities is maintaining compliance with various state, local, and federal employment regulations. Over the last two years alone there have been countless new laws and updates focused on high-stakes pandemic-related legislation, and with good reason. As we creep further into 2022, employers will continue to grapple with certain federal and labor laws surrounding COVID-19, as well as a host of other legal challenges.
As a result, companies are turning to professional employer organizations (PEO) for compliance solutions and guidance. Working with a PEO helps reduce employer risk and given the frequency of employment legislation updates—provides real-time insight and expertise to meet compliance standards as they happen.
Here’s a brief look at some of the new employment laws and regulations SMB employers and brokers should know for 2022 and beyond:
OSHA Requirements for COVID-19 Vaccinations
Late last year, the Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard (ETS) requiring large, private employers in the United States to either require COVID-19 vaccinations or allow employees to test weekly for the virus. The Supreme Court blocked this ETS from being enforced for the foreseeable future, but OSHA is moving forward with a proposal to issue a “permanent COVID-19 Healthcare Standard” to apply in the workplace.
By no means has the conversation about vaccination mandates disappeared. For example, most New York City employers are required to have a fully vaccinated workforce, while some states have implemented legislation prohibiting workplace vaccinations. It’s important to continue preparing for compliance and employers should determine the local and state rules on workplace vaccinations, notify employees about what to expect regarding any possible COVID-19 vaccination or test requirements, prepare a compliant vaccination or testing policy, and develop a plan to handle religious and medical exemption requests.
Business leaders should also leverage the resources and compliance experts at your PEO company. The experts at a PEO can help your business stay compliant and up to date with the everchanging COVID-19 mandates and regulations. Additionally, PEOs can offer technology solutions for tracking and maintaining records of your employee’s vaccination status. For instance, ExtensisHR’s COVID-19 Data Tracker enables employees to easily and securely upload vaccination proof (or ongoing testing requirements) and supply vaccine information.
Note: If your organization services Medicare and Medicaid patients, the Centers for Medicare & Medicaid Services (CMS) Interim Final Rule (IFR) on COVID-19 Health Care Staff Vaccination applies to your organization. The IFR is now in effect and covered healthcare facilities should continue to implement policies and procedures requiring “staff” (as that term is defined in the IFR) to be fully vaccinated against COVID-19.
No Surprises Act
In late 2020, Congress passed the No Surprises Act (NSA) in an effort to combat surprise medical billing. Surprise medical bills occur when insured patients inadvertently receive care from out-of-network hospitals, doctors, or other providers they did not choose.
The NSA imposes a host of new transparency and coverage requirements for employer-sponsored group health plans, and we kicked off the new year with this statute taking effect on January 1, 2022. Under this act, fully insured group health plans “must hold plan participants harmless from surprise medical billings” with respect to out-of-network services.
Employers should review their current process for determining non-network claims and work with their brokers or PEO partner to evaluate how this will change the administration of their health plans.
HIPAA-Compliant Wellness Incentives
In October 2021, the U.S. Departments of Labor, Treasury, and Health and Human Services issued a FAQ sheet offering guidance for employers wanting to provide incentives to increase COVID-19 vaccination rates among their employees. This alert was intended to assist employers in identifying any legal issues that needed to be addressed when considering whether to implement a similar incentive program in their own workplace, and whether it would be covered under HIPAA rules.
This guidance stated that a group health plan may offer its participants incentives only if it satisfies five requirements:
- The program must give eligible individuals the opportunity to qualify for the reward at least once annually
- The total incentive or penalty/surcharge cannot exceed 30% of the total cost of employee-only coverage
- The program must be reasonably designed to promote health or prevent disease
- There must a reasonable alternative available for individuals who cannot qualify due to a medical condition or medically inadvisable to participate
- The plan must include notice of available alternative options in written plan materials
However, there are further rules issued by the Equal Employment Opportunity Commission under the Americans with Disabilities Act that should be reviewed. The compliance professionals at your PEO can help determine what these changes mean for your business, and how to interpret new policies in practical terms.
New York City Salary Transparency Mandate
In an attempt to tackle pay inequality, New York City has recently passed a law that requires most employers to specify salary ranges for all job postings. The mandate will go into effect on May 15, 2022 and will apply to employers with more than four employees, excluding temporary hiring firms. Similar wage transparency laws already exist in a handful of other states, including Colorado, California, and Connecticut.
Not posting the minimum and maximum salaries will be considered an “unlawful discriminatory practice” under the city’s human rights law and may result in a fine of up to $125,000. Employers should look to their PEO partners for guidance and assistance in creating compliant job descriptions. Business leaders can also work with the experts at their PEO company for resources including compensation tools and services, which analyze market pricing and salary benchmarking to ensure pay ranges are competitive.
There are several other laws on the horizon that will impact New York employers:
- Electronic Monitoring of Employees: Taking effect on May 7, 2022, this law requires New York employers to provide prior notice concerning the monitoring of employee telephone, email, or internet usage.
- Whistleblower Protection Act: For the second year in a row, New York state has expanded protection for whistleblowers. Under the expansion, current and former employees, as well as independent contractors, are now protected.
- Hindered Use of Automated Tools in Hiring and Promotion Decisions: While it doesn’t take effect until January 1, 2023, this law will regulate the use of “automated employment decision tools” in hiring and promotion decisions within the city. The scope of this term is broad, but encompasses any process that uses machine learning, statistical modeling, data analytics, or artificial intelligence to replace human discretion in screening candidates for employment or promotions within New York City.
Similar laws have been passed throughout the country, including Connecticut, Colorado, Nevada, and Rhode Island. Partnering with a PEO will keep you updated on these regulatory changes and help update your recruitment and hiring practices to remain compliant.
Minimum Wage Adjustments
While the federal minimum wage has remained unchanged for over a decade, 26 states will increase their minimum wages this year. This means SMB leaders must stay up to date with all minimum wage news for their region and industry. Employers should also be prepared to act quickly when wage increases do occur, which isn’t always at the start of a new year. It’s also important to be aware of what the minimum wage rate is in your state because that may affect your compensation strategy.
When a new minimum wage takes effect, employers must update payroll records or risk compliance violations and associated penalties. However, working with a PEO company eliminates this task. A PEO manages payroll responsibilities and makes all necessary changes to comply with state and local requirements.
Connecticut Family and Medical Leave Act (FMLA)
Connecticut previously provided 16 weeks of unpaid leave over two years for employees that have worked 1,250 hours in a year. But beginning in January 2022, Connecticut employees can now take 12 weeks of paid leave for personal and family health needs in a 12-month period. This is now considered one of the most generous in the country, applies to a wider range of employers, and expands the reasons for which employees can take leave. Connecticut employers should update their policies accordingly and reach out to their PEO partner or HR outsourcing professional for guidance.
Tap into PEO expertise
Laws will surely change in the coming year, but rather than tackling each new challenge as it happens, work with the HR and compliance experts at your PEO company. These professionals are proactive about monitoring new laws and employment trends affecting your workplace.
To learn more about the expected workforce changes in 2022, tune into our webinar, “What’s New in 2022? HR Changes for the New Year.” The webinar outlines emerging HR trends and employment laws taking effect this year, the latest COVID-19 regulations, actions required for new compliance legislations, and more.