While the presidential election is still ongoing as of Wednesday morning, several states passed ballot measures that have significant workplace implications.
In Colorado, voters approved a measure to implement a paid family and medical leave program in the state, which will be funded in part by payroll taxes. The program will provide up to 12 weeks of leave with an additional four weeks for pregnancy or childbirth complications. The measure creates a social insurance program similar to those that already exist in New Jersey and California.
The Colorado Department of Labor and Employment will not start collecting premiums until 2023. Claims payments wouldn’t start until a year later, with first-year benefits capped at $1,100 per week regardless of a worker’s normal income.
Roger Trim, a managing shareholder in labor and employment law firm Ogletree Deakins’ Denver office, said the new law will have both “economic and operational impacts” for employers beginning in 2023. Trim noted that premiums for the first two years of the program (2023 and 2024) will be 0.9% of the employee's wage (0.45% paid by the employer and 0.45% paid by the employee). Additionally, businesses with less than 10 employees will be exempt from paying the premium. Premiums will be adjusted for 2025 so that the total amount of premium contributions to the program equal 135% of the previous year's claims and 100% of the administration costs.
Federal paid leave protections provided by the Families First Coronavirus Response Act are set to expire Dec. 31, and federal lawmakers have so far been unable to agree on how a national paid-leave program might be established.
“There is an ongoing debate regarding the best way to fund paid family leave and whether the government should mandate paid family leave or simply provide a framework for paid family leave to employers,” said Deirdre Macbeth, content director, regulatory at WorldatWork. “Until the federal government takes more action on this issue, we will continue to see a hodgepodge of state and local paid family leave laws that will vary in terms of scope and funding mechanisms.”
From a compensation perspective, Florida voters passed an initiative to raise the state's minimum wage from $8.56 an hour to $15 incrementally by 2026. The state’s voters approved the minimum wage ballot initiative by just over 61%, according to the Associated Press. Florida now joins seven other states in voting to increase its minimum wage to $15 an hour at some future point.
Gig Economy Fights Back
In California, voters approved a measure backed by gig economy companies including Uber, Lyft and Doordash that would classify workers using their platforms as independent contractors despite the passage of AB5 last year by state lawmakers that classified many as employees.
Backed by more than $200 million from Uber, Lyft, DoorDash, Instacart and Uber-owned Postmates, Proposition 22 is the costliest ballot measure in California's history, according to Ballotpedia, underscoring how important its passage was to the future of their businesses.
If drivers were classified as employees, Uber and Lyft would be responsible for paying them minimum wage, overtime compensation, paid rest periods, and reimbursements for the cost of driving for the companies, including personal vehicle mileage. The ride-sharing companies have been in a contentious court battle over the past year.
Uber and Lyft had refused to comply to the law because it would require them to fundamentally alter their business models in California, the state where both companies were founded. At issue is the classification of ride-hailing drivers as independent contractors. Uber and Lyft say drivers prefer the flexibility of working as freelancers, while labor unions and elected officials contend this deprives them of traditional benefits like health insurance and workers’ compensation.
The passage of Prop 22 allows the companies to operate with its original business model with some tweaks. According to the new law, companies who engage these workers as independent contractors will also need to provide health-care subsidies, maintain harassment and discrimination prevention programs, and develop new policies that ensure a guaranteed minimum level of compensation.
“Prop 22 initiates a potentially new category of independent worker who is not an employee and not a traditional independent contractor, but a worker who receives benefits usually provided to employees while maintaining the right to control the means and manner of their work,” said Mike Nader, a shareholder in Ogletee Deakins’ Sacramento office and a member of the firm’s California Advice Group.
More States Legalize Marijuana
Voters in four states approved ballot measures to legalize recreational marijuana use, while those in two states voted to establish medical marijuana programs, which could bring sweeping changes to HR compliance at the state level.
Arizona, Montana, New Jersey and South Dakota passed ballot measures that fully legalize marijuana in their state while Mississippi legalized medical marijuana. There are now 15 states where marijuana is fully legal and 36 where it is partially legal.
As more states decriminalize marijuana use, it presents an interesting conundrum for employers that drug test employees and prohibit the use of it outside the workplace.
Employers that operate in only one state will have an easier time crafting new drug-use policies than multistate employers who must consider the nuances of varying state laws, Dale Deitchler, a shareholder with Littler Mendelson in Minneapolis told WorldatWork in 2018.
“If you want a nationwide policy that is very surgical and addresses every situation, you’re just not going to be able to get there,” Deitchler said. “As long as (marijuana) remains federally illegal while we’ve got the vast majority of states that have enacted these laws, it’s going to be an exercise in navigating land mines.”
About the Authors
Brett Christie is the managing editor of Workspan Daily.
Mark McGraw is the managing editor of Workspan.