Your Guide on US Employment Laws 2024
Over the last year, the United States has experienced various US employment law trends and changes. There are many new US employment laws taking effect in 2024. As employment law differs on a state and federal level, it’s important to get it right when employing workers in the US.
As always, PGC is here to help guide you through the ever-evolving landscape of US employment laws with our latest round of updates for 2024. We hope this guide on US employment laws for 2024 will help your business be prepared for any changes and their impacts.
US employment laws affecting the following states:
US Employment Laws Effective From H2 2023
In preparing for 2024, it is important to ensure compliance with US employment laws that became effective in the second half of 2023. Here are some key updates to be aware of.
California Updates to Criminal History Regulations
If you engage workers in California, it’s important to be aware of US employment law updates regarding asking job applicants about criminal history.
Updates to Criminal History Regulations: California’s Fair Employment and Housing Act regulations were amended with respect to how employers can use criminal history information when making employment decisions. This includes:
The definition of “applicant” has been expanded to include existing employees who have applied for or expressed interest in a different position with the employer, or whose criminal histories are reviewed because of a change in ownership, management, or policy.
The definition of “employer” has been expanded to include any direct and joint employer, any entity that evaluates the applicant’s conviction history on behalf of an employer or acts as an agent of an employer; any staffing agency; and any entity that selects, obtains, or is provided workers from a pool or availability list.
Employers are prohibited from stating in job postings, on applications, or in other hiring materials that individuals with criminal histories will not be hired. This includes statements like, “no felons” or “must have a clean record.”
If an applicant voluntarily discloses their criminal history, employers cannot consider that information until after a conditional job offer has been made – assuming, the record can be considered at all.
Laws Related to Independent Contractors
Nevada
Misclassification Penalties: Nevada amended its law regarding penalties for employee misclassification offenses where W-2 employees are misclassified as independent contractors. As amended, for the first misclassification offense, an employer will receive a warning. For the second and subsequent offenses, the employer will be subject to a penalty of $5,000 for each employee willfully misclassified.
Los Angeles
Freelance Worker Protections Ordinance: Los Angeles has enacted protections for freelance workers, defined as individuals (or entities whose legal and beneficial interests and whose work is performed and held entirely by no more than one individual) hired or engaged as bona fide independent contractors to perform services in the City of Los Angeles for a hiring entity in exchange for compensation.
If the work performed by the freelance worker is valued at $600 or more in a calendar year, either through cumulative jobs or an individual job, a written contract must be memorialized between the freelance worker and the hiring entity, and must include:
The name, mailing address, phone number, and, if available, email address of both the hiring entity and the freelance worker;
A list of the services provided, the value of these services, and the rate and method of compensation; and
The date that payment will be due for the services, or how the date of payment will be determined. If the contract does not contain a specific date, then payment is due within 30 days of the rendering of services pursuant to Los Angeles law.
While PGC maintains a separate Contractor Payment Agreement with C2Cs placed by our clients, it is imperative that you, as the hiring entity, provide a written contract to your C2Cs in accordance with these requirements, if applicable.
US Employment Laws 2024 Updates
US Overtime Exemption Salary Threshold Updates
Under the federal Fair Labor Standards Act, employees generally must be paid a minimum salary of $684 weekly, or $35,568 annually, to be classified as exempt from overtime, with limited exceptions.
Although the Department of Labor has announced a proposed rule change that would allow more employees to remain non-exempt from overtime, the current Fair Labor Standards Act requirements remain in effect for the foreseeable future. PGC is monitoring the proposed change and will notify you and provide best practice guidance, should the proposal take effect.
In the meantime, the following states and localities have adjusted their minimum exemption salary thresholds:
State Computer Employee Exemption
The federal hourly rate for employees in a computer-related occupation is $27.63 hourly, or $684 weekly, to be classified as exempt from overtime. The following states have adjusted their minimum salary exemption requirement for computer employees:
California: $55.58 hourly, or $115,763.35 annually
Colorado: $33.17 hourly, or $55,000 annually
Washington: $56.98 hourly, or $67,724.80 annually
401(k) Updates for 2024
The federal “highly compensated” threshold, as it relates to retirement plans, will increase from $150,000 to $155,000. There are also changes to both the Traditional 401(k) and the Roth 401(k), discussed below.
Traditional 401(k)
In 2024, employee contributions to 401(k) will cap at $23,000 – a $500 increase from 2023. The catch-up deposits for individuals aged 50 and older will remain at $7,500.
Roth 401(k)
The maximum yearly contribution for a Roth 401(k) will increase from $6,500 to $7,000. The IRA catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
Health Savings Account (HSA) Contributions Update
The annual federal inflation-adjusted limit on HSA contributions for self-only coverage will increase from $3,850 to $4,150. The HSA contribution limit for family coverage will increase from $7,750 to $8,300.
Affordable Care Act (ACA) Affordability Update
The ACA affordability threshold – used to determine if an employer’s lowest-premium health plan meets the ACA’s affordability requirement – will be 8.39% of an employee’s “household income,” reduced from 9.12% in 2023, for plans beginning in calendar year 2024. This is the ACA’s lowest affordability threshold since the ACA’s implementation.
State-by-State US Employment Law Legislative Updates
California Employment Law Updates 2024
California Expanded Paid Sick Leave 2024
Effective January 1, 2024, California will expand its statewide paid sick leave entitlements, from 24 hours or three days per year to 40 hours or five days per year. The state law will preempt the local laws to the extent that it is more favorable to employees. For more information and a complete list of states and localities where paid sick leave is required in 2024, please refer to PGC’s Paid Sick Leave Guide.
Expanded Prohibitions Against Non-Competes in California
With limited exceptions, contracts restraining an employee from lawfully working or doing any kind of business – in other words, non-compete agreements – are generally considered void and unenforceable in California. Effective January 1, 2024, noncompete agreements will become void and unenforceable no matter where or when they were signed – including instances where the contract was signed and the employment was maintained, outside of California.
Prohibitions on Discrimination Based on Off-Duty Cannabis Use in California
Effective January 1, 2024, California will prohibit employers from discriminating in their hiring, termination, employment terms or conditions, or otherwise penalize an individual if the discrimination is based on:
1) the individual’s use of cannabis when they are off-the-job and away from the workplace; or
2) an employer-required drug screening test that found the individual to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.
The law does not affect an employer’s rights or obligations under California law to maintain a drug- and alcohol-free workplace based on an employee’s cannabis use on the job. At this time, there are no drug tests that can distinguish between non-psychoactive cannabis metabolites and psychoactive metabolites – as such, employers should refrain from including marijuana in pre-employment drug tests, unless an exception applies.
Exceptions include positions that require federal background and clearance checks. Furthermore, employers will be prohibited from requesting information from an employee or applicant about their prior cannabis use, and from discriminating in the hiring, termination, or any term or condition of employment based upon any information obtained about a person’s prior cannabis use from the person’s criminal history.
Leave for a Reproductive Loss in California
Effective January 1st, 2024, California employees will be entitled to a leave of absence for reproductive-related loss, expanding upon the state’s existing bereavement leave available for the death of an employee’s family member.
The new law will increase leave entitlements for a “reproductive loss event,” which is defined as the day, or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.
The law will permit employees to use up to five days of leave following a reproductive loss event, within three months of the event. Leave under the law is unpaid, unless the employer has an existing policy requiring paid leave under the circumstances. Employees are entitled to choose to use any accrued and available sick leave, or other PTO, for reproductive loss leave.
San Francisco – Health Care Security Ordinance (HSCO)
Under San Francisco’s Health Care Security Ordinance, covered employers must satisfy the employer spending requirement by making required health care expenditures on a quarterly basis on behalf of covered employees.
The expenditure rate for employers with 100 or more employees nationwide will increase from $3.40 per hour to $3.51 per hour, up to a maximum of $603.72 per month, on January 1, 2024. The 2024 ordinance exempts all managerial, supervisory, and confidential employees who earn more than $121,372 per year from this requirement, increasing from the current threshold of $114,141.
California Minimum Wage Updates 2024
Localities throughout California will increase their minimum wages in the upcoming year. The following list highlights changes to minimum wage, effective January 1, 2024, and exceeding $18.50 per hour:
City of Mountain View – Minimum wage will increase from $18.15 to $18.75 per hour.
City of Sunnyvale – Minimum wage will increase from $17.95 to $18.55 per hour.
Workplace Violence Prevention Plan
Effective July 1, 2024, California employers with 10 or more employees at a worksite must include a written workplace violence prevention plan as part of its injury prevention program. The plan must be designed specifically for the hazards and corrective measures for each work area and operation, and include:
Names and titles of people responsible for the plan
Plan development procedures that include employee involvement
Implementation and training methods, communication methods
Response procedures and antiretaliation protections
Compliance procedures for supervisory and nonsupervisory employees
Hazard identification and correction procedures
Post-incident response and investigations; efficacy and annual review
Colorado Employment Law Updates 2024
Colorado Paid Family and Medical Leave (FAMLI)
Covered employees can begin utilizing Colorado Paid Family and Medical Leave on January 1, 2024. To be entitled to job protection during the leave, the employee must have worked for the employer for at least 180 days before taking the leave. Employees may be eligible to take up to 12 weeks of FAMLI leave per year for family, medical, qualifying exigency, and safe leave, with an additional four weeks available for pregnancy or childbirth complications. Employers cannot require covered employees to use accrued vacation leave, sick leave, or other PTO before or while receiving paid family leave.
Job Application Fairness Act in Colorado
Effective July 1, 2024, Colorado will prohibit employers from inquiring about a prospective employee’s age, date of birth, and dates of attendance at or date of graduation from an educational institution on an initial employment application. If employers request that applicants provide application materials, such as transcripts or graduation certificates, employers must notify applicants that they may redact information that identifies their age, date of birth, or dates of school attendance or graduation.
Hawaii Employment Law Updates 2024
Hawaii Pay Transparency Law
Effective January 1, 2024, Hawaii will require employers to disclose the hourly rate or salary range in job postings. This will only apply to employers with 50 or more employees, but the law does not specify whether this threshold includes employees outside of Hawaii. Best practice guidance would be to include the salary range in job postings, regardless of the employee count.
Illinois Employment Law Updates 2024
Paid Leave for All Act
Effective January 1, 2024, the Act will require Illinois employers to provide employees with up to 40 hours of paid leave per year to be used for any purpose. As a note, the Act will not apply to any employer that is covered by a municipality or county ordinance, including ordinances covering Chicago and Cook County. For more information and a complete list of states and localities where paid sick leave is required in 2024, please refer to PGC’s Paid Sick Leave Guide.
Cook County – Paid Leave
Cook County has passed a new paid leave ordinance, replacing its current paid sick leave ordinance on December 31, 2023. Similar to Illinois’s statewide leave law, employees will be permitted to use up to 40 hours of paid leave per year to be used for any purpose. For more information on the new law, please refer to PGC’s Paid Sick Leave Guide.
Chicago Paid Sick Leave and Paid Leave
Chicago has enacted a new paid leave ordinance, which will replace the city’s existing paid sick leave ordinance. The new law was originally set to take effect on December 31, 2023; however, on December 13th, the City’s Council voted to delay the law’s effective date until July 1, 2024. Like the city’s current paid sick leave ordinance, employees will be entitled to accrue up to 40 hours of paid sick leave per year. However, the new ordinance provides for an additional entitlement of 40 hours of annual paid leave accrual that may be used for any purpose – thus, totaling to 80 hours of leave per year. Until July 1, 2024, Chicago’s current paid sick leave law will remain effective. For more information on the new law, please refer to PGC’s Paid Sick Leave Guide.
Protections for Freelance Workers Act
Illinois has enacted a law establishing strict protections for freelance workers, effective July 1, 2024. Freelance worker is defined as a natural person who is hired or retained as an independent contractor by a contracting entity to provide products or services in Illinois or for any Illinois-based entity in exchange for compensation of at least $500.
Under the Act, agreements between freelance workers and contracting entities must be memorialized in a written contract and include:
The name and contact information of both the contracting entity and the freelance worker;
An itemization of all products and services to be provided by the freelance worker, the value of the products and services to be provided under the terms of the contract, and the rate and method of compensation;
The date on which the contracting entity must pay the contracted compensation or the mechanism by which such date will be determined, which shall be no later than 30 days after the product or services are provided; and
The date by which a freelance worker must submit a list of products or services rendered under such contract to the contracting entity, if such a list is required in order to meet any internal processing deadlines.
If the contract does not specify when the hiring party must pay the contracted compensation or the mechanism by which the date will be determined, contracting entities will be required to pay freelance workers within 30 days after the freelance worker has completed the services or delivered the product.
Contracting entities will be prohibited from engaging in any discriminatory, retaliatory, or harassing behavior toward contracted freelance workers.
While PGC maintains a separate Contractor Payment Agreement with C2Cs placed by our clients, it is imperative that you, as the hiring entity, provide a written contract to your C2Cs in accordance with these requirements, if applicable.
Minnesota Employment Law Updates 2024
Earned Sick and Safe Leave
Effective January 1, 2024, Minnesota will require employers to provide employees statewide with up to 48 hours per year of earned paid sick and safe leave. Prior to this leave, there were only paid sick leave entitlements in Minneapolis, Bloomington, St. Paul, and Duluth. The state law will preempt the local laws to the extent that it is more favorable to employees. For more information and a complete list of states and localities where paid sick leave is required in 2024, please refer to PGC’s Paid Sick Leave Guide.
Prohibition on Salary History Inquiries
The Minnesota Human Rights Act has been amended, effective January 1, 2024, to prohibit employers, labor organizations, and employment agencies from inquiring into or considering from any source the salary history of any applicant, with limited exceptions. If an applicant voluntarily, and without prompting from the employer, discloses their salary history, the employer may consider that information, but only to support a wage or salary higher than initially offered.
New York Employment Law Updates 2024
Freelance Isn’t Free Act
Effective May 20, 2024, New York State will expand on New York City’s Freelance Isn’t Free Act, requiring certain protections for freelance workers statewide. A freelance worker is defined as a natural person or organization composed of no more than one natural person that is hired or retained as an independent contractor by a hiring party to provide services in exchange for an amount greater than $800, either by itself or in the aggregate, for all contracts for services between the same hiring party and freelance worker during the immediately preceding 120 days. A hiring party is any party or entity that retains a freelance worker to provide any service.
Under the Act, contracts between a freelance worker and hiring party must be executed in writing, and include:
The name and mailing address of the hiring party and the freelance worker;
An itemization of all services to be provided by the freelance worker, the value of the services to be provided, and the rate and method of compensation; and
The date by which a freelance worker must submit a list of services rendered under such contract to the hiring party in order to meet any internal processing deadlines of the hiring party for purposes of timely compensation.
If the contract does not specify when the hiring party must pay, a freelance worker must be paid no later than 30 days after the completion of services under the contractor.
While PGC maintains a separate Contractor Payment Agreement with C2Cs placed by our clients, it is imperative that you, as the hiring entity, provide a written contract to your C2Cs in accordance with these requirements, if applicable.
Clean Slate Act
Effective November 16, 2024, New York will require automatic sealing of the records of certain convictions after specified periods of time. The New York State Human Rights Law will be amended to prohibit employers from inquiring about sealed records or discriminating against applicants or employees based upon sealed records.
The Act will seal the records of criminal convictions under state law under the following timeline:
Traffic infractions involving driving while the driver’s ability is impaired by the influence of drugs or alcohol will be sealed after three years.
Misdemeanors will be sealed three years from the individual’s release, or the imposition of sentence if there was no sentence of incarceration.
Felonies will be sealed after eight years from release.
Records automatically sealed under the Act may still be accessed and used by any entity that is required under state or federal law to conduct a fingerprint-based background check, and any entity authorized to conduct a fingerprint-based background check where a job applicant would be working with children, the elderly, or vulnerable adults.
Rhode Island Employment Law Updates 2024
Wage Theft and Employee Misclassification Penalties
Rhode Island has amended its wage payment laws, effective January 1, 2024, to increase the criminal penalty for employers involved in wage theft and employee misclassification.
Wage Payment Violations
The amendments create felony penalties, up to three years imprisonment or a fine up to $5,000, if an employer knowingly and willfully:
Fails to pay employees on a regular payday and the amount owed is over $1,500
Fails to pay any employee wages owed at the time of termination of employment and the amount is over $1,500
Fails to pay wages owed to a deceased employee to the appropriate person within 30 days of death, and the amounts owed are greater than $1,500
Independent Contractor Misclassification
An employer that misclassifies an employee as an independent contractor under the Fair Labor Standards Act test is liable for civil penalties in the amount of $1,500 to $3,000 for each misclassified employee for the first offense, and up to $5,000 for each misclassified employee for any subsequent offense.
Oregon Employment Law Updates 2024
Bias Victim Leave
Effective January 1, 2024, victim leave will be available to eligible employees who are victims of bias, which includes, but is not limited to, crimes in which the perpetrator causes physical injury, places another person in fear of imminent serious physical injury, interferes with property with the intent to cause substantial harm, or intentionally subjects another person to offensive physical contact, due to the perpetrator’s perception of the other person’s race, color, religion, gender identity, sexual orientation, disability, or national origin. Victim leave may be unpaid, though an employee may use any paid accrued vacation leave, sick leave, or other paid leave.
Washington State Employment Law Updates 2024
Applicant Marijuana Testing Prohibition
Effective January 1, 2024, Washington will prohibit employers from making hiring decisions based on off-duty marijuana use, including positive pre-employment drug tests that find an applicant to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids, with limited exceptions. At this time, there are no drug tests that can distinguish between non-psychoactive cannabis metabolites and psychoactive metabolites – as such, employers should refrain from including marijuana in pre-employment drug tests, unless an exception applies. The law does not apply to applicants seeking positions requiring a federal background investigation or security clearance, certain public safety positions, and certain safety-sensitive positions.
Minimum Wage Updates
Statewide and local minimum wage increases will take effect on January 1, 2024. The following list highlights changes to minimum wage laws exceeding $18.50 per hour:
City of SeaTac – Minimum wage will increase from $19.06 to $19.71 per hour.
Seattle – Minimum wage for Schedule 1 employers with more than 500 employees nationwide will increase from $18.69 to $19.97 per hour.
Any Questions on the US Employment Laws for 2024?
Trying to get to grips with employment compliance in North America can be a real headache. We get it.
As the longest-serving Employer of Record exclusive to the North American market, we’ve been a trusted partner for businesses from all around the globe; removing the barriers and complexity of engaging workers across the US and Canada.
We provide best practice guidance pursuant to applicable law and manage onboarding, payroll, expenses, insurance, and benefits, so you don’t have to. Speak to one of our specialist expansion consultants to see how we can help your business.
Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.