Workforce Bulletin

Employers in many states and localities will see an increase in minimum wages starting July 1, 2025.

Many Changes Coming in California

As it often does, California leads the way with a patchwork of minimum wage increases across localities and industries scheduled for this summer.

Los Angeles Prepares for the Olympics with Proposed Wage Increases

Employers, workers, and advocates have been closely following headlines regarding Los Angeles’s so-called “Olympic Wage” initiative. The legislation in question, Ordinance 188610, requires higher minimum wages, minimum health benefits, and training standards for employees of large hotels and employers servicing the Los Angeles International Airport (“LAX”). This is not the first time these industries have been singled out; however, this proposal specifically contemplates the upcoming 2026 World Cup and 2028 Olympics.

On May 1, 2025, the U.S. Department of Labor’s (DOL) Wage and Hour Division (Division) issued Field Assistance Bulletin (FAB) No. 2025-1 (“FAB 2025-1”), announcing that it is currently working to reformulate the test as to how independent contractor status is determined under the Fair Labor Standards Act (“FLSA”).  Although it is unclear what contours the revised rule will eventually take, FAB 2025-1 signals a clear intention to make it easier for businesses to classify workers as independent contractors. 

The rulemaking process will take time.  FAB 2025-1 accordingly provides that, during the interim, the DOL will no longer enforce a 2024 rule established under the Biden administration.  The 2024 rule, which consisted of a non-exhaustive multi-factor test, is largely viewed as placing a difficult hurdle with respect to independent contractor classification.

FAB 2025-1 relaxes the DOL enforcement standard by reverting to the “economic reality” framework outlined in Fact Sheet #13 (July 2008), as informed by Opinion Letter FLSA2019-6. The “economic reality” framework asks whether the worker is an independent contractor in business for themselves, or an employee economically dependent on the business they serve. While this does not involve a single rule or test, significant factors include:

As the Southern California wildfires rage on with devastating consequences, employers may be grappling to formulate an appropriate response. Employers may have specific legal obligations as well as optional ways to provide assistance to affected employees. This publication addresses applicable employment laws that implicate pay, leaves, and other aspects of employment that may be impacted by the wildfires. Employers should also review our publication on special benefits they may wish to provide.

Employer Obligations

Notice Requirement for New Hires

California law requires employers to provide non-exempt employees with a wage theft notice upon hire. Among other requirements, employers must notify employees if there is a state or federal emergency or disaster declaration applicable to the county or counties where the employee will work issued within 30 days before the employee’s first day of employment that may affect their health and safety. Accordingly, employers in Los Angeles and Ventura counties will need to notify non-exempt employees starting employment within thirty days after January 7, 2025 that the Governor issued an Emergency Proclamation related to the wildfires if the emergency may affect their health and safety during their employment.

In recent years, advocates and lawmakers have been pushing to expand the reach of “ban-the-box” measures designed to remove job barriers for individuals with criminal convictions. “Ban-the-box” laws, also called “fair chance laws,” are designed to prevent employers from excluding applicants based on their criminal history alone, by prohibiting employers from immediately inquiring into an applicant’s criminal history before evaluating their qualifications.

Ban-the-box laws have been adopted federally (for federal agencies and federal contractors acting on their behalf) and in numerous states and local jurisdictions. These laws generally contain broad carve-outs for employers or positions where background checks are required, including within the financial services industry. Some changes are coming to narrow those exemptions. On December 23, 2022, President Biden signed into law the Fair Hiring in Banking Act (FHBA), which substantially revised Section 19 of the Federal Deposit Insurance Act (FDIA) to reduce hiring barriers within the financial services sector.

The Tenth Circuit recently reaffirmed that employers may lawfully enforce a policy against surreptitious recordings.

In Spagnolia v. Charter Communications, LLC, the United States Court of Appeals for the Tenth Circuit unanimously affirmed a District of Colorado order granting employer Charter Communications, LLC’s (“Defendant”) summary judgment on claims filed by plaintiff Heather Spagnolia (“Spagnolia”), who asserted that she was fired in retaliation for making reasonable requests for lactation accommodations. The issue before the appellate court was whether Defendant’s proffered reason for terminating Spagnolia (secretly recording meetings with her supervisors in violation of company policy) was pretextual. 

Both courts agreed that Spagnolia’s violation of the policy against surreptitious recordings was a lawful basis for termination, and that Spagnolia failed to show that this was pretextual.

Background

In 2017, Spagnolia moved to Colorado to work for Defendant as a Regional Operations Center Specialist. From April to July 2019, Spagnolia took leave under the federal Family and Medical Leave Act to give birth to her second child. When she returned to work in July 2019, Spagnolia’s supervisor mistakenly permitted her to take paid lactation breaks, even though Defendant’s written policy provided for unpaid lactation breaks. During that time, Spagnolia’s lactation breaks lasted for an average of two hours per day, and sometimes up to three hours—in addition to her lunch break and regular paid breaks.

A growing number of states and municipalities have passed “fair chance” laws that, to varying degrees, prohibit employers from inquiring into a job applicant’s criminal background during the hiring process or restrict employers from using certain criminal conviction information in connection with their hiring decisions. Recently, Los Angeles County joined this group and New York City is posed to again amend the rules for its existing law. The Los Angeles developments create new intricacies for employers, while the New York actions may be best understood as clarification of existing law. In either case, keeping up with the changes is important for employers who are hiring in those locations. 

Los Angeles County’s New Law

The Los Angeles County Fair Chance Ordinance for Employers (“FCO”) was adopted by the Los Angeles County Board of Supervisors on February 7, 2024, and becomes operative on September 3, 2024. The FCO was designed to complement California’s “Ban-the Box” law, called the Fair Chance Act (“FCA”), and introduces additional compliance requirements for covered employers, including, but not limited to, mandatory language for job postings and solicitations, and written notice requirements in connection with the extension of a conditional offer of employment.