What’s new for legal and HR in 2023 that affects small and large companies?
By Daniel McCoy
There have been many changes due to various regulations and laws enacted that affect small and large companies alike, with more to come in 2023. Some changes that have occurred were not directly related to business but will have a significant impact.
One food industry-related bill signed into law last May is HB 1443, regarding food truck permitting. This new law allows mobile foodservice organizations, including food trucks, to sell food in any of the 159 counties in Georgia while attaining only a single permit. This is a tremendous improvement, as previously a permit was required in every county to operate.
In October 2022, a new EEOC update occurred, and employers must display the new poster in their place of business. This is the first update to the Labor Law Poster since 2009. (You can download a copy at govdocs.com/new-eeoc-labor-law-poster. It’s currently available in both English and Spanish, with other languages soon to follow.)
The new guideline retains the barring of job discrimination based on:
- Race
- Color
- Sex (including pregnancy and related conditions, sexual orientation or gender identity)
- National origin
- Religion
- Age (40 or older)
- Disability or genetic information
- Equal pay
The new rule now includes information on retaliation for bringing a “charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation or proceedings.”
Employers with 15 or more employees are subject to most EEOC laws and need to display the posters. There is the option for employers to provide employees the posters digitally, as well as in the physical location.
In December 2022, the Speak Out Act went into effect. This federal law prohibits “judicial enforceability” of nondisclosure or non-disparagement clauses in cases of sexual harassment or sexual assault.
What’s interesting is that the Act only applies to those agreements signed before the dispute is filed, not afterward, and only applies to sexual misconduct, not discrimination of age or race etc. In other words, those forms employers often have employees sign not to make public or “write a book” about charges of sexual harassment or assault are basically worthless, unless the person agrees after the fact. It would make sense for employers to edit their onboarding paperwork to do away with these nondisclosure or non-disparagement clauses for sexual harassment or assault in onboarding or company handbooks, as they will no longer be enforceable.
The U.S. Department of Labor’s Wage and Hour Division has increased minimum wage for federal government contract workers. Effective Jan. 1, 2023, the minimum wage under Executive Order 14026 rises to $16.20 per hour and under the same order, “tipped employees performing work on or in connection with contracts covered by Executive Order 14026 generally must be paid a minimum cash wage of $13.75 per hour.” This will be on the new poster as well.
In October 2022, the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) jointly announced an extension until July 31, 2023, of the policy allowing remote, virtual verification of the documentation required for a Form I-9 when a workforce is working remotely. There is a belief that this will eventually become a permanent method of verification.
Still to come, the Department of Labor has been gathering public input regarding a proposed rule change when determining whether a worker is an independent contractor or an employee under FLSA. The proposed rule change would add back the “economic reality test.” This test allows the courts to determine whether the worker is economically bound to the employer and not really in business for themselves.
The proposed new rule will also have six major factors to consider:
- Opportunity for profit or loss depending on managerial skill
- Investment by the worker and the employer
- Degree of permanence of the work relationship
- Degree of control
- Degree to which the work performed is an integral part of the employer’s business
- Skill and initiative
This change could have the most effect on “gig workers” – someone who does temporary or freelance work as an independent contractor, usually on an informal or on-demand basis – making the guidelines more rigid in the classification of independent contractors.
If the worker is considered an employee and not an independent contractor, then the employer becomes responsible for FUTA and SUTA taxes, collecting payroll taxes, Social Security payments, and adhering to laws and regulations such as EEOC, FLSA and FMLA.
For instance, a person who has been considered an independent contractor and has been putting in 48 hours a week would be entitled to back overtime pay if he was determined to be a W2 employee, as well as the employer catching up all the unemployment and employee taxes, with interest, as well as penalty fines. In a recent case in California, the U.S. Department of Labor recovered $1.6 million for 83 restaurant workers due to the owner refusing to pay them overtime. The owner of seven establishments was also fined $62,167 in civil money penalties, in addition to the $825,775 in overtime wages and equal amount in damages.
Under the economic reality test, if a worker is dependent on only the company for his/her financial well-being, then they may be considered an employee and not an independent contractor. Using the No. 5 factor above, is this person performing work that is critical to the business, such as delivering food to customers for a food delivery company?
No. 4 has always been a critical factor – the extent of control the business has over the worker. Does the company provide the instruments and supplies to accomplish the job, set the worker’s schedule, or dictate how the worker performs their work? Are there written contracts between the involved parties or benefits offered?
Also, in many states, the use of cannabis has become a major HR issue. Georgia now allows qualified persons to possess low-THC oil. In many states, marijuana has been legalized for medical use, and 20 states have legalized it for recreational use. Drug tests can show traces of marijuana for months after use. What policies do companies put into effect to regulate their employees’ use of this product?
Something else to watch in the coming year is a greater focus on employee investment and training. As recruiting and hiring remains a challenge for most employers, retention of existing staff becomes even more important. Potential employees continue to express desire for opportunity for advancement, flexibility, benefits and adequate salary.
Another Georgia law that went into effect on Jan 1, 2023, is Senate Bill 319, which allows Georgia gun owners to carry a concealed handgun in public without first obtaining a license. In 2010, Georgia repealed several location restrictions, including one that prohibited legal gun owners from carrying where alcoholic beverages are served in a restaurant or other eating establishment. And in 2014, Georgia repealed restrictions on carrying firearms in bars.
Property owners or those in authorized control of the property, thorough a rental agreement, lease, contract or other agreements, generally have the right to determine the presence or prohibition of firearms on their property. The restaurant would need to post a “No Firearms” sign since they are open to the public.
When it comes to employees, the policy needs to be in writing, such as in the employee handbook. Georgia law allows the employee to bring the firearm on the property, but they must keep it secured in their locked vehicle.
No matter how you move forward with this information, now is the time to update your handbook. If you do not have one, put one together. Because until it is in writing, it is only a suggestion and cannot legally be enforced. There are many services that can assist, including the Small Business Development Center (georgiasbdc.org) and SCORE (score.org), a nonprofit that provides a network of volunteer, expert business mentors to small business owners around the country.
Daniel McCoy joined the UGA Small Business Development Center at KennesawState University as a business consultant 2017, after a 21-year successful banking career as a Commercial/SBA Lender and Financial Adviser and 10+ years in upper management in the retail industry. He is a Certified Professional for the Society for Human Resource Management (SHRM), a member of the National Society of Leadership and Success and recently completed the Veteran At Work Certification process. He is also a 2019 Flewellen Award for Consulting Excellence winner. For more on how the UGA Small Business Development Center can help your concept, go to georgiasbdc.org or contact daniel at dmccoy@georgiasbdc.org.
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