Virginia Peabody | The Wagner Law Group

HR & Employment Law Updates in Massachusetts, Maine, New Hampshire, and Vermont

2026-06-02T12:42:19Z

By Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff and Virgina Peabody I. Massachusetts: Pay Transparency Law Takes Effect In February 2025, the Wagner Law Group reported on amendments to the Massachusetts Equal Pay Act, which included new data reporting obligations and pay transparency rules for Massachusetts employers. Specifically, employers with 100 or more employees are now required to submit wage data reports on February 1 of each year. See “Massachusetts Pay Transparency Law: Key Provisions and Compliance Timeline.” (HB4890). Beginning on October 29, 2025, new salary posting rules under the Act take effect and apply to Massachusetts employers with 25 or more employees. The new salary posting requirements include: (i) disclosing pay ranges (annual salary or hourly wage) in all job postings – internal or external, and (ii) providing pay range information upon an employee’s request for their current position and/or when offering a promotion or transfer to a new role. Employers should begin preparing now to ensure their HR departments, job postings, and internal processes are fully compliant well in advance of the deadline and in anticipation of a more transparent labor market. This is also a good time for employers to review the total compensation packages for all employees and/or conduct an audit of job functions and corresponding pay to ensure equity and fairness in the workforce with an eye toward retaining top talent. II. Maine: Paid Family & Medical Leave Contributions Begin Contributions to Maine’s Paid Family and Medical Leave (“PFML”) Fund began on January 1, 2025. Once the benefits are available, all (full-time and part-time) employees in the private and public sectors (other than federal employees) will be able to take up to 12 weeks of paid leave per year if they earn at least six times the state average weekly wage (“SAWW”) in earnings subject to PFML premiums during the four quarters preceding the benefit year. Self-employed individuals may opt into the program if they wish to do so. Covered individuals may take leave for reasons that include their own serious health condition, bonding with a new child, caring for a family member with a serious health condition, addressing issues related to a family member’s military service, and for any other reason set forth in 26 M.R.S. § 843(4). Employers with 15 or more covered employees must pay a premium of 1% of wages to the ME PFML Fund, but may deduct up to 50% of the premium (0.5% of wages) from employees’ wages. Employers with fewer than 15 employees are required to contribute 0.5% and may deduct the full amount from employees’ wages. Employers can deduct their share of the premium as a business expense. In the case of a pick-up (i.e., where an employer with 15 or more employees chooses to pay the entire 1%, covering both its and its employees’ contributions), the employer may deduct the whole amount as a business expense. Employers that maintain a private plan providing benefits, rights, and protections that are “substantially equivalent” to the state program may apply for a private plan exemption and need not make contributions to the ME PFML Fund. Such plans must meet specific requirements. For example, a private plan must provide a substantially equivalent wage replacement rate, maximum weekly benefit amount, and duration of leave, and allow for the same covered reasons for taking leave as specified under the state program. If the private plan is self-insured, the employer must furnish a bond to the state with a surety company authorized to transact business in the state. In addition, a contested benefit determination by a private plan is subject to an appeal before the Department of Family and Medical Leave. (see 26 M.R.S. § 850‑H (1), (2), (5)). ME PFML benefits currently will be available starting May 1, 2026. However, due to a high volume of employers electing to establish private plans instead of participating in the state program, the ME PFML is reportedly underfunded. As a result, the Maine Department of Labor has indicated that the start date for benefit availability may be postponed. III. New Hampshire: New Nursing Break Requirements Effective July 1, 2025, employers with six or more employees must provide nursing employees with 30-minute unpaid lactation breaks for every three hours of work for up to one year after the birth of a child. The lactation breaks must be provided, regardless of the nursing employee’s classification or whether the break overlaps with regular rest periods. These breaks are for the purpose of “express[ing] breast milk,” which is defined as “the initiation of lactation by manual or mechanical means but shall not include breastfeeding.” NH Rev. Stat § 275:78. The law allows the break to be taken concurrently with any other break the employer already provides. For example, if the employee has a scheduled meal or rest break, the lactation break can run concurrently. Employers must provide a private space for nursing, other than a bathroom. The space must be within a reasonable walk of the employee’s worksite, unless otherwise mutually agreed, shielded from view, and free from intrusion. The space can be either temporary or permanent, but it must be clean, functional, and equipped with seating and an electrical outlet. The law requires employers to provide notice at the time of hire to all employees of the employer’s lactation break policy. It also requires nursing employees to provide two weeks’ advance notice before using the accommodation. This allows employers time to make the necessary arrangements. Employers may be exempt from this obligation if they can demonstrate that providing the accommodation imposes “undue hardship”, defined as “significant difficulty or expense when considered in relation to factors such as the size of the business, its financial resources, and the nature and structure of its operation.” Id. IV. Vermont: Pay Transparency Law Vermont’s Act Relating to Disclosure of Compensation in Job Advertisements (Act 155) became effective July 1, 2025. Act 155 requires employers with five or more employees and with at least one employee who works in Vermont to include a job’s salary or range of compensation in their job postings. Advertisements for jobs that are primarily compensated on a commission basis must state that the job is commission-based but need not include a salary or an expected compensation range. Further, employers are now required to identify tip-compensated positions as such and include the applicable base wage or range of base wages in job postings. Vermont’s new pay transparency law is exclusively enforced by the Vermont Attorney General, whose Civil Rights Unit currently enforces Vermont laws on equal pay and fair employment. According to the Attorney General, disclosing the “range of compensation” means disclosing “the minimum and maximum annual salary or hourly wage that the employer, acting in good faith, expects to pay for the advertised job at the time it creates the ad.” See Final Version of H 704 Guidance (12-31-24).pdf The new legislation does not cover oral advertisements, general notices of employment opportunities (rather than specific job openings), or job openings for work performed outside Vermont. However, it does apply to advertisements that describe a remote job calling for work that is predominantly performed either in a Vermont office or other Vermont work location. The ability of employers and workers to negotiate pay during the application or hiring process is also not limited by this act. It requires an employer to be transparent about the compensation or range of compensation for a job at the time that the advertisement is posted. If you have questions about how these changes may affect your organization or need assistance updating your policies and procedures, our Employment Law and Human Resources team is ready to help. Please feel free to reach out to Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, or Virginia Peabody for guidance and support.

Important Update to the Federal Independent Contractor Test

2026-06-02T12:44:52Z

By Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, and Virginia Peabody (Senior Consultant) The Department of Labor (DOL), through its Wage and Hour Division (WHD), issued a Field Assistance Bulletin (FAB No. 2025-1) stating that as of May 1, 2025, it will no longer apply the 2024 Biden-era independent contractor rule in its enforcement of the Fair Labor Standards Act (FLSA). The 2024 rule set out a six-pronged “economic realities” test to determine whether a worker is an employee covered by the FLSA or an independent contractor, who is not. Overall, the Biden-era rule is pro-employee, meaning that utilizing the six-pronged test is more likely to result in a worker’s being classified as an employee. The six factors are: 1) Opportunity for profit or loss depending on managerial skill; 2) Investments by the worker and the potential employer; 3) Degree of permanence of the work relationship; 4) Nature and degree of control; 5) Extent to which the work performed is an integral part of the putative employer’s business; and 6) Skill and initiative. The question of who qualifies as an employee under the FLSA is not new. Near the end of his first term, President Trump’s Administration released what is commonly referred to as the Trump 2021 rule. The Trump 2021 rule emphasized two factors as determinative of a worker’s status: 1) The nature and degree of the worker’s control over the work, and 2) The worker’s opportunity for profit or loss based on initiative and/or investment. Compared to the 2024 rule, the Trump 2021 rule was seen as pro-business or pro-employer. It made it easier to classify workers as independent contractors, which generally excluded such workers from FLSA protections. By keeping things simple, it reduced uncertainty. The rule had its critics though, as many argued it tilted things too heavily in favor of businesses. That brings us to FAB No. 2025-1, issued on May 1. Instead of continuing to uphold the 2024 rule or reverting to the Trump 2021 rule, the DOL and its WHD are reverting to enforcement based on the 2008 version of Fact Sheet #13, which outlined the following seven-factor test: 1) The extent to which the services rendered are an integral part of the principal’s business; 2) The permanency of the relationship; 3) The amount of the putative contractor’s investment in facilities and equipment; 4) The nature and degree of control by the principal; 5) The alleged contractor’s opportunities for profit or loss; 6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and 7) The degree of independent business organization and operation. It is worth emphasizing that the 2008 framework does not invalidate the 2024 rule. The Biden-era rule remains formally in effect and may apply in private litigation. The DOL, however, will not enforce it in its investigations or when imposing penalties. In effect, the DOL is freezing enforcement of the 2024 rule. Employers may feel more confident using independent contractors under the 2008 standard, but caution is still warranted. Several states have stricter classification tests (e.g., California’s and Massachusetts’ so-called ABC test which starts with the presumption that all workers are employees) that may expose employers to liability even if they comply with federal standards. These are pitfalls that employers should be wary of, consulting legal counsel to avoid falling into them. If you have questions about how this enforcement shift may impact your worker classification practices, compliance obligations under the FLSA, or state law exposure, our Employment Law and Human Resources Team is here to assist. For strategic guidance and risk assessment, please contact Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, or Virginia Peabody (Senior Consultant).

Form I-9: What is It and What’s Changed

2026-06-02T12:45:32Z

by Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, or Virginia Peabody (Senior Consultant) The U.S. Citizenship and Immigration Services (“USCIS”) released a revised Form I-9, dated January 20, 2025. While the updates are minor, understanding both the purpose of the form and the nature of these revisions is essential for compliance. Form I-9 is a document submitted by an employer to the federal government verifying that an employee hired by the employer is authorized to work in the United States. Employers are required to maintain, in a file separate from their personnel file, a properly completed Form I-9 and must be prepared to produce it during an audit or investigation. Noncompliance can result in significant civil fines or criminal penalties, debarment from federal contracts, and reputational harm. In 2019, USCIS updated its I-9 related penalties:

Paperwork Violations: $230 - $2,292 per form
Knowingly Hiring Unauthorized Workers:

First offense (per worker): $573 - $4,586

Second offense: $4,586 - $11,463

Third or subsequent offenses: $6,878 - $22,927

Document Fraud (I-9 Fraud or Misuse):

First offense: $400 - $3,195

Subsequent offenses: $3,195 - $9,472 The 2025 updated Form I-9 contains the following changes:

Section 1, checkbox #4, has been renamed to “An alien authorized to work.”
USCIS has revised the descriptions of two List B documents in the Lists of Acceptable Documents.
The DHS Privacy Notice has been revised to reflect updated statutory language.

The new edition of Form I-9 is available for immediate use and will remain valid through May 31, 2027. While these updates are minor, they are emblematic of a more comprehensive systematic shift for employer obligations related to immigration reporting and compliance. In December, our Employment and Human Resources (“HR”) Law team issued a news alert informing our clients that employers ought to stay vigilant about Form I-9 reporting requirements, particularly in light of potential policy shifts under a second Trump administration. These updates reaffirm our initial prediction that employers will be under increased scrutiny in fulfilling their immigration reporting requirements. If you need assistance navigating Form I-9, updating your HR systems, or ensuring compliance with employment eligibility verification requirements, our Employment Law and Human Resources Team is here to help. Contact Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, or Virginia Peabody (Senior Consultant) for guidance and support.

Attention Employers: EEO-1 Reporting Deadline Approaching

2025-03-31T13:34:20Z

By Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff and Virginia Peabody (Senior Consultant) The EEO-1 report for covered employers must be filed with the EEOC by June 4, 2025.

Who Needs to File?

Private employers with 100+ employees.
Businesses with under 100 employees if they are part of a group with a combined total exceeding 100 employees.
Institutions with at least 50 employees that manage government funds or handle U.S. savings bonds and notes.
Federal contractors with 50+ employees and a contract of $50,000+

Note that at present it is unclear whether there will be further guidance for federal contractors.

Action Steps:

✔ Confirm if your business meets EEO-1 federal filing requirements. ✔ Submit your EEO-1 report to the EEOC by June 4, 2025.

Need Help With EEO-1 Reporting?

If you need assistance with EEO-1 reporting — whether ensuring compliance, preparing and submitting your report, or navigating the requirements — our Employment Law and Human Resources Team at The Wagner Law Group is here to help. Contact Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, or Virginia Peabody for guidance and a streamlined filing process.

Massachusetts Pay Transparency Law: Key Provisions and Compliance Timeline

2025-03-31T13:37:54Z

Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, and Virginia Peabody (Senior Consultant) On February 1, 2025, a new law regarding salary posting requirements went into effect for all Massachusetts employers with 25 or more employees. “An Act Relative to Salary Range Transparency” amends the Massachusetts Equal Pay Act (“MEPA”) by adding data reporting obligations and new pay transparency rules. Gov. Healy signed the act on July 31, 2024, and stated that the law aims to address pay disparities. Some provisions took effect on February 1, 2025, and the remaining provisions will take effect on October 29, 2025. Massachusetts employers with 25 or more employees must abide by the new salary posting requirements. Those requirements include: (i) disclosing pay ranges (annual salary or hourly wage) in all job postings – internal or external, and (ii) providing pay range information upon an employee’s request for their current position and/or when offering a promotion or transfer to a new role. Massachusetts employers with 100 or more employees must submit additional reports to the Secretary of the Commonwealth. EEO-1 data reports are to be sent by February 1 of each year. EEO-3, EEO-4, and EEO-5 reporting requirements rotate biennially, depending on whether the year is odd or even:

In odd-numbered years (2025, 2027, etc.):
- EEO-3 and EEO-5 reports are due on February 1.
In even-numbered years (2026, 2028, etc.):
- EEO-4 reports are due on February 1.

Employers should note that the Executive Office of Labor and Workforce Development (“EOLWD”) will publish industry aggregate wage and workforce data. However, individual wage data reports are not public records.

Date	Requirement
Feb. 1, 2025	Employers must begin submitting wage data reports.
Apr. 1, 2025	The Secretary of the Commonwealth will provide initial wage data reports.
June 1, 2025	First publication of aggregate wage data reports.
Oct. 29, 2025	Full implementation of the law.
Feb. 1, 2026	Additional employer reporting requirements take effect.

The Attorney General’s office has exclusive authority to enforce this law. Any covered employer that fails to submit the wage data reports and/or fails to include salary ranges in job postings, promotions, and upon request will face the following penalties:

1st offense: Warning
2nd offense: Fine up to $500
3rd offense: Fine up to $1,000
4th and subsequent offenses: Higher penalties under Section 27(c) of Chapter 149

Note that during the first two years after the law’s effective date, employers have two business days after notice of a violation to correct defects before fines are imposed. In other words, all violations will have a two-business-day grace period to fix issues before penalties are imposed. If you would like to discuss how Massachusetts’ new Pay Transparency law may impact your organization – whether in ensuring compliance with salary disclosure requirements, preparing wage data reports, or mitigating potential penalties – please reach out to our Employment Law and Human Resources Team: Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, and Virginia Peabody of The Wagner Law Group.

Executive Orders Addressing Diversity, Equity, and Inclusion Initiatives

2025-03-31T14:18:31Z

By Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff and Virginia Peabody (Senior Consultant) Last week, President Trump signed two executive orders (the “Trump Executive Orders” or “Orders”) repealing diversity, equity, and inclusion (“DEI”) and diversity, equity, inclusion, and accessibility (“DEIA”) initiatives. The Trump Executive Orders require the federal government and federal contractors to terminate all discriminatory programs explicitly including DEI and DEIA mandates, policies, programs, preferences, and activities under whatever name they appear. They also require all federal agencies to encourage private-sector employers to terminate their discriminatory practices, including “race-and sex-based preferences,” and DEI mandates, policies, programs, and activities. The Trump Executive Orders make clear that employment decisions should be based on merit, aptitude, hard work, and determination without taking into consideration whether or not the individual is in a protected class. They also rescind Executive Order 11246 and the regulations promulgated under it that previously required the federal government to take affirmative action and prohibited federal contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. Accordingly, on January 25, 2025, the Acting Secretary of Labor ordered Department of Labor employees to end all investigative and enforcement activity under Executive Order 11246 and to cease and desist from all related activities with respect to pending cases, conciliation agreements, investigations, complaints, and any other enforcement-related or investigative activity under Executive Order 11246. Federal contractors have 90 days to comply with the Trump Executive Orders. NOTE: While the Trump Executive Orders are quite broad and do not define illegal or discriminatory programs per se, they clearly state that rebranding a DEI or DEIA initiative would not be acceptable. In addition, the Trump Executive Orders do not provide any specifics on how to measure “merit, aptitude, hard work, and determination” in the context of employment decisions. Without any guidance from the federal government, it is not yet possible to determine the full scope of the prohibitions and what, if any, practices would be consistent with the Orders.

I. Federal Contractors and Subcontractors

In accordance with the Orders, the Office of Federal Contract Compliance Programs (“OFCCP”) must immediately stop: (i) promoting diversity, (ii) requiring federal contractors and subcontractors to comply with affirmative action, and (iii) encouraging federal contractors and subcontractors to maintain balanced workplaces based on race, color, sex, sexual preference, religion, or national origin.

Federal contractors and subcontractors may not consider race, color, sex, sexual preference, religion, or national origin in ways that violate federal civil rights laws in their employment, procurement, and contracting practices.

Furthermore, federal contractors and grant awards must include language stating that the contractor agrees to comply with applicable federal anti-discrimination laws. The contractor must also certify that it does not operate any programs promoting DEI in violation of federal anti-discrimination laws.

II. Private-sector Employers

The Attorney General must, within 120 days, provide a report to the Assistant to the President for Domestic Policy with recommendations to encourage private sector employers to end illegal discrimination and preferences. Among other things, the report must provide a strategic enforcement plan that: (i) identifies key areas of concern, (ii) identifies the most egregious and discriminatory companies in each area of concern, (iii) provides strategies to deter illegal discrimination and preferences, and (iv) identifies litigation that would be appropriate for federal lawsuits, intervention, or statements of interest. Each relevant agency must list up to nine potential civil compliance investigations of publicly traded corporations, large non-profits, foundations with assets of $500,000,000 or more, state and local bar and medical associations, and institutions of higher education with endowments over $1 billion.

III. Educational Institutions

Within 120 days after the issuance of the Orders, the Attorney General and the Secretary of Education must provide guidance regarding measures and practices to comply with Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023) which found that race-based affirmative action plans used for college admissions (except military academies) violated the Equal Protection Clause of the Fourteenth Amendment.

IV. Exceptions

The Trump Executive Orders indicate a possible exception in the case of employment and contracting preferences for veterans. They also do not prevent state or local governments, federal contractors, or federally-funded state and local educational agencies or institutions of higher education from engaging in First Amendment-protected speech, and they do not prohibit federally-funded institutions of higher education from teaching, advocating for, endorsing, or promoting unlawful employment or contracting practices prohibited by the Trump Executive Orders.

V. Takeaways

Because the scope of the Trump Executive Orders is quite broad, employers should, with assistance from legal counsel, carefully review all their Human Resources practices (e.g., hiring, promoting, mentoring, etc.) to identify any policies, procedures or practices that may be perceived as including illegal discrimination and preferences under federal law. In addition, employers should continue to monitor guidance from the federal government regarding the scope and application of the Trump Executive Orders and perform regular training for managers and supervisors accordingly.

If necessary, Human Resources practices should be modified, with advice from legal counsel, to comply with the Orders. However, employers should be mindful that other federal statutes, such as Title VII of the Civil Rights Act (“Title VII”), the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Dodd-Frank Act, and individual state anti-discrimination laws still apply. Employers should train managers and supervisors so that they understand that, even though affirmative action and DEI initiatives may not be permitted, Title VII and other federal, state, and local statutes still apply.

Complying with Title VII may not be as straightforward as it has been in the past. Discrimination claims may become more complex. For example, a company promotes a woman instead of a man. The man files a complaint because he feels he deserves/merits the promotion more than the woman because he has more education or went to better schools. The company hired the woman even though she does not have as much education because she has more job-related experience. Employment decisions will need to be carefully documented to demonstrate that such actions are based on merit and/or other factors unrelated to race and sex and not based on illegal discrimination or preferences. To mitigate potential litigation, employers should carefully document Human Resources actions by explaining the business need for such action.

In the past, employers have made decisions because one individual is a better fit based on personality. This is a purely subjective opinion and should be carefully documented to demonstrate that the decision is not discriminatory.

Furthermore, employers may face more litigation if individuals who were not historically protected by anti-discrimination laws may now be able to file claims of discrimination based on their race or sex.

VI. Conclusion

The Trump Executive Orders will have a significant impact on federal contractors and subcontractors, private employers, and educational institutions. The scope of the changes will be clearer when guidance is issued. In the meantime, many private employers should review their programs in case they become the subject of an audit or investigation. Such a review would also be beneficial in case of litigation.

We will continue to monitor developments and provide alerts as more information becomes available. If you would like to further discuss the impact of the Trump Executive Orders on your organization, please reach out to our Employment Law and Human Resources Team: Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff, and Virginia Peabody (Senior Consultant) of The Wagner Law Group.

I-9 Compliance and Audits Under Forthcoming Intensified Enforcement: Why Employers Should Act Now

2024-12-19T13:59:39Z

By David Gabor, Katherine Brustowicz, Virginia Peabody and Craig White With the incoming Administration prioritizing the deportation of illegal immigrants, employers across the country are preparing for a surge in I-9 audits and vigilant reporting enforcement as violations of the I-9 process and paperwork will soon be under higher scrutiny. On June 28, 2024, DHS announced the following fine schedule:

I-9 paperwork violations: $281 to $2,789 per Form I-9
Knowingly employing unauthorized alien:
- First Offense $698 to $5,579 per violation
- Second Offense: $5,579 to $13,946 per violation
- Third or Higher Offense: $8,369 to $27,894 per violation
E-Verify Employers – Failure to inform DHS of continuing employment following final non-confirmation: $973 to $1,942 per relevant employee

These steep penalties are avoidable. Now is the perfect time for employers to conduct self-audits and ensure paperwork is in proper order. Conducting a self-audit of current Form I-9s is a critical first step toward ensuring compliance and mitigating risks. Proper training of on-boarding staff in how to fill out Form I-9s and verify required documentation is essential. Employers have several legal obligations and responsibilities for Form I-9 compliance. The following list, while not exhaustive, illustrates the complexities and importance of proper Form I-9 compliance. As of the publication of this newsletter, employers are required to:

complete Section 2 of the Form I-9 within three business days of the employee’s first day of employment;
examine original, unexpired documents presented by the employee that establish both identity and authorization to work in the United States;
retain completed Form I-9s for at least three years from the date of hire or one year after the termination of employment, whichever is later; and
in the case of certain non-citizen employees, timely reverify employment authorization no later than the date on which employment authorization expires.

If you have questions about Form I-9 compliance, reporting or recordkeeping requirements, please contact David Gabor or Katherine Brustowicz of The Wagner Law Group’s Employment Law and Human Resources practice. For more information, please visit our website at www.wagnerlawgroup.com.

DOL Releases Final Rule Revising FLSA Overtime Regulations

2024-05-21T21:01:30Z

By Virginia Peabody (Senior Consultant) and Cassandra White (Paralegal) On April 23, 2024, the Biden administration announced a final rule that impacts overtime protections by increasing compensation thresholds. The rule is intended to assist lower-paid salaried workers by expanding their overtime protections. The Fair Labor Standards Act (“FLSA”) requires employers to pay overtime to employees who work more than 40 hours per week unless they are exempt. Employees who meet the Executive, Administrative, Professional, Computer & Outside Sales Employees exemption are not required to be paid overtime. To be exempt, such employees must meet a duties test and a salary test. No changes are being made to the duties test. Employees currently meet the salary test if their salary is greater than $35,568 annually ($684 per week). The final rule increases the salary threshold for overtime eligibility from an annual salary of $35,568 to an annual salary of $43,888, effective July 1, 2024. There will be another increase on January 1, 2025, to $58,656. Beginning July 1, 2027, the salary threshold will increase every three years to reflect changes in earnings and to protect the effectiveness of the rule. Updated wage data will be used to establish these increases. Currently, employees who perform office or non-manual work and are paid a total of $107,432 or more per year meet the exemption for highly compensated employees if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee. Effective July 1, 2024, the final rule will raise the threshold for highly compensated employees from $107,432 to $132,964 annually. The threshold will increase again on January 1, 2025, to $151,164 annually. Beginning July 1, 2027, the salary threshold for highly compensated employees will increase every three years to reflect changes in earnings and to protect the effectiveness of the rule. Updated wage data will be used to determine these increases. Additionally, there are no exemptions for nonprofit organizations under the final rule: nonprofit organizations with revenues of $500,000 or more, excluding revenue related to charitable activities, must comply with the final rule. While a nonprofit organization may not be subject to FLSA, individuals employed by such nonprofit employers may be covered by the Fair Labor Standards Act if the individual is engaged in interstate commerce such as the production of goods for interstate commerce, or a closely related process or occupation essential to the production of goods for interstate commerce. For example, an individual would be covered if they make/receive interstate telephone calls, ship goods or other items to another state, or provide transport to another state. Individuals who, on rare occasions, spend an insubstantial amount of time engaged in interstate commerce are not covered by FLSA. It is anticipated that there will be numerous challenges to the final rule. On February 16, Rep. Eric Burlison (R-Mo.) filed a bill that would prohibit the final rule from going into effect; this bill has not yet received a committee vote. Additionally, various associations such as the HR Policy Association have supported an extended compliance window to assist employers in adapting to the change. To date, no delay or extension has been granted. As a result, employers should begin to plan for the final rule. In light of this new final rule, employers should be mindful that employees previously viewed as “exempt,” including office professionals making six-figure salaries, may no longer be exempt. Employers should perform an analysis to determine which positions would be impacted by the threshold increases. Employees who meet the duties test, but not the new salary thresholds should be treated as non-exempt employees. However, employers may find that it will be more cost-effective and less administratively burdensome to increase salaries for certain positions so that employees continue to meet the FLSA exemption for executive, administrative and professional employees. Nonprofit organizations should perform an analysis to determine if they are subject to FLSA as an organization. Nonprofit organizations that are not subject to FLSA should perform a review to determine if any individual employees are subject to FLSA. A review of state law should also be performed to determine what impact, if any, the new thresholds may have on determinations of exempt employee status at the state level. If a decision is made to increase salaries, some employers may want to consider increasing salaries only once by applying the January 1, 2025, thresholds on July 1, 2024, to minimize disruption. Other employers may prefer to increase salaries on July 1, 2024, and January 1, 2025, because it would be more cost-effective. Employers should also consider how salary increases necessary to maintain exempt status will impact annual raises. The changes to the thresholds and the impact on employees need to be carefully communicated. Consequently, employers should also draft and send a notice to affected employees explaining: (i) why they are now eligible for overtime or why their salaries are being increased, and (ii) any additional impact the changes may have on the employees (e.g., non-exempt employees must get authorization before working overtime). The distribution of the notice should be carefully timed in case the final rule is delayed. If you have any questions about the overtime thresholds, or need assistance reviewing employees’ exempt status, please reach out to Katherine Brustowicz, David Gabor, Johanna Matloff, or Ginny Peabody (Senior Consultant) of The Wagner Law Group’s Employment Law Team.

FTC Ban On Noncompetes: 7 Things Employees & Executives Must Know

2024-05-10T12:59:30Z

FTC Ban On Noncompetes: 7 Things Employees & Executives Must Know - Quoting WLG Law Alert by Katherine Brustowicz, David Gabor, Johanna Matloff, Mark Poerio, Andrew Oringer, and Virginia Peabody, May 8, 2024 (PDF)

Ban on Non-Competition Agreements – What Employers Need to Know and Do Now

2025-12-10T01:56:35Z

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Introduction

On April 23, 2024 the U.S. Federal Trade Commission (FTC) approved a proposed final rule which bans new non-competition clauses in employment contracts for most workers across the United States. The ban stems from the FTC’s view that non-competition clauses suppress wages and unfairly limit competition in violation of Section 5 of the Federal Trade Commission Act. This groundbreaking change in the law of non-competes is of significant importance to those employers and other service recipients who place value on non-compete agreements, and to those employees and other service providers who are adversely affected by non-competes.

Implications of Ban

Once the new rule goes into effect, existing non-compete agreements will become unenforceable, and employers will be required to provide notice to both current and former workers that their noncompete clauses are no longer enforceable. Employers will also need to reconsider forfeiture-for-competition provisions (which are often included in stock awards or deferred compensation plans) because the FTC’s non-compete prohibition extends to terms or conditions of employment that penalize workers for violating non-competition covenants. There is a grandfathering provision for senior executives (workers earning more than $151,164.00 per year who are in a “policy-making position”) who have non-competes that were entered into before the final rule’s effective date, but employers may not enter into or enforce new non-competition agreements with senior executives. Certain not-for-profit entities are exempt from the final rule. and non-competes entered into pursuant to a bona fide sale of a business entity may also remain in place.

Timing

The ban goes into effect 120 days after it is published in the Federal Register, on August 22, 2024. It does not apply retroactively to causes of action accruing before the final rule’s effective date. For example, if an alleged breach occurred before the final rule goes into effect, the ban would not apply. It is important to note that enforcement is likely to be delayed by legal challenges. This sweeping ban has already received negative feedback from various business groups, and the U.S. Chamber of Commerce has already sued the FTC, arguing the regulator has overstepped and the non-compete ban should be blocked. An injunction is likely to be sought to halt the rule from imminently taking effect. Although the rule appears to be motivated by the FTC’s goal of eliminating unfair methods of competition, there is substantial concern that the new rule will actually have the opposite effect and limit businesses’ ability to protect their legitimate trade secrets and confidential data.

State Law

The final rule supersedes state laws to the extent, but only to the extent, that such state laws conflict with the final rule or would otherwise permit or authorize conduct prohibited under the final rule. The notice requirement in the final rule supersedes any state law with a conflicting notice requirement. Employers must comply with state laws that have stricter bans on non-competes.

What Employers Should Do Now

Employers should review existing noncompetition agreements and identify categories of employees who may fall within an exception to the ban, including senior executives or employees involved in the bona fide sale of a business. Once the final rule is published, employers should draft notices that, in accordance with the final rule, advise employees that they will not enforce non-competes after the final rule’s effective date. The notice should be sent to current and former employees, excluding senior executives who are exempt, before the final rule goes into effect. The rule includes model notice language and creates a safe harbor for employers that use the model notice. Not-for-profits should perform a careful analysis to determine if they are subject to the final rule or if any of their businesses are subject to the final rule before any notices are sent to employees. Employers should update existing offer letters and non-disclosure and confidentiality agreements to remove restraints on competition and other restrictive covenants that may no longer be enforceable under the new ban. The ban does not nullify non-solicitation, non-recruitment, confidentiality, or non-disclosure agreements, but only if they do not have the impact or effect of a non-competition agreement. Such agreements should be carefully reviewed to ensure that they do not have provisions that would be considered non-compete language under the final rule. Since non-competes have largely been governed by state law, an employer should review state laws where it has employees to determine whether those laws have even stricter bans on non-competes and other restrictive covenants that may apply after the final rule goes into effect, and how that could impact any agreements with employees. Given the uncertainty surrounding the enforceability of the new rule, employers concerned with protecting their confidential and proprietary information should not only eliminate non-competes from their employment agreements but also carefully review and revise non-solicit, non-disclosure, and other restrictive covenants to ensure that they are narrowly tailored to protecting the employer’s confidential and proprietary information. Employers should review and augment confidentiality clauses and consider limiting the sharing of propriety information and trade secrets to only those employees who really need to know.

Conclusion

Employers are encouraged to discuss the impact of the ban on their business with their employment counsel. If you have any questions about the ban, or need assistance in crafting your restrictive employment agreements or understanding your state specific employment laws, please reach out to Katherine Brustowicz, David Gabor, Johanna Matloff, or Ginny Peabody (Senior Consultant) of The Wagner Law Group’s Employment Law Team. Mark Poerio and Drew Oringer of The Wagner Law Group’s Executive Compensation Group also have significant expertise in this area and are available to assist.

Wage and Hour Updates for Maine, New York, and New York City

2023-08-15T15:33:43Z

By Katherine Brustowicz, David Gabor, Virginia Peabody I. Maine – Mandatory Vacation Payout Upon Separation from Employment Maine will follow Massachusetts’ lead in implementing mandatory vacation payout upon employment separation. An amendment to the State of Maine’s final wage statute will require all private employers with 11 or more employees to pay out any accrued but unused vacation time no later than the payday following termination of employment. The change will apply to vacation accrued on or after January 1, 2023. Covered Employers: The amendment will apply to all private Maine employers with 11 or more employees but does not apply to public sector employers. If a collective bargaining agreement (“CBA”) governs the employees’ employment and includes provisions addressing the payout of vacation time upon employment separation, the CBA supersedes the amended Act. In the event that an employer sells a business, employees must be paid their accrued vacation within two weeks after the sale date. However, the buyer may, in a written agreement with the seller, agree to be responsible for the accrued but unpaid vacation. Penalties: Employer noncompliance may result in damages in the amount of the accrued vacation time plus interest and liquidated damages equal to two times the amount owed. Uncertainties: The short amendment brings with it a splash of ambiguity. The amended Act is silent as to whether the 11-employee threshold includes employees who work in other states. In the absence of any guidance, employers should consider complying with the amendment if they have 11 or more employees and only one works in Maine. For companies that allow employees to work remotely, a review should be performed to determine how many of their remote employees work from Maine. It is also in conflict with the relatively new Maine Earned Paid Leave Law which, since its enactment in 2021, indicates that if an employer has a vacation policy that clearly specifies unused vacation time will not be paid at the time of separation, then the Earned Paid Leave balance need not be paid. The amendment does not address the impact on paid time off programs that employers maintain instead of vacation and sick leave programs. Takeaways: Affected employers should review and update their payroll practices to comply with the amendment, ensure that their payroll provider tracks leave properly for employees in Maine, and send notices about the change to employees before January 1, 2023. HR handbooks, policies, and procedures should also be updated as needed. II. New York & New York City – Pay Transparency Laws New York State Law: Senate Bill 9427, a pay transparency law that is currently awaiting Governor Kathy Hochul’s signature, will go into effect 270 days after it has been signed. If enacted, the law would require New York employers with four or more employees to include a salary range and job description (if any) in each job advertisement, promotion, or transfer opportunity. Employers must maintain records of the history of compensation ranges and job descriptions (if any) for each position. The bill also includes an anti-retaliation provision. As a result, employers may not refuse to interview, hire, promote, or employ an applicant or current employee for exercising any of the rights as provided by the law. The state commissioner of labor will investigate and prosecute any violations of the law. Civil penalties may be imposed up to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations. There is no private right of action. New York City: New York City enacted a pay transparency law that will take effect on November 1, 2022. The law requires employers to provide a salary range or hourly range, in good faith, for all advertised job openings, promotions, or transfer opportunities. The pay transparency requirements must be met for positions that can or will be performed, in whole or in part, in New York City. This includes work performed in an office, in the field, or remotely from the employee’s home. This is similar to the pay transparency law that will take in place in Albany, Westchester, and Ithaca counties later in 2022. Modifications: Modifications have been made to the law, which had previously been scheduled to take effect in May. The modifications clarify that this pay transparency law applies to both in-person and remote workers. There is a 30-day grace period for employers who have, for the first time, neglected to include a salary range. Penalties: If the violating employer fails to add a salary range to the posting within the 30-day grace period, that employer will incur a fine. A private right of action exists for current employees, but not for job applicants. Takeaways: It should be noted that employers will need to comply with not only state law, but also county law to the extent applicable. What should New York employers do now? Prepare for the likely enactment of the state pay transparency law by crafting job descriptions and preparing good-faith annual salary and hourly rate ranges for job postings. Employers should consider conducting an equal pay audit to determine if there are any pay inequities. It is important to note that pay transparency gives employees a better sense of one another’s salaries. If an employee discovers that a similarly situated co-worker is paid significantly more, morale issues can arise impacting productivity. This can also lead to increased turnover and discrimination or equal pay claims The Wagner Law Group’s HR and Employment Law team is here to assist you. We keep up to date on changes to state-specific wage and hour matters and can effectively counsel employers on compliance. We also help to create practical policies and advise on all matters relating to the employer-employee relationship. Please do not hesitate to reach out to Katherine Brustowi cz, David Gabor, or Ginny Peabody

Mandated Benefits: 2022 Compliance Guide Mid-Year Update

2023-08-10T14:41:17Z

Mandated Benefits: 2022 Compliance Guide Mid-Year Update – Katherine Brustowicz, Dannae Delano, David Gabor, Virginia Peabody, Barry Salkin, Marcia Wagner and Roberta Casper Watson, Wolters Kluwer, July 2022

Prepare for Shot-or-Test Mandate Inspections

2021-12-29T18:30:58Z

Earlier this week a Federal Court panel revived the Covid-19 emergency temporary standard (ETS). Now, litigation challenging the emergency shot-or-test mandate is making its way to the United States Supreme Court. However, that will not stop the quickly approaching Occupational Safety and Health Administration (“OSHA”) inspections of large employers for compliance with the rule and potential citations for non-compliance. Recap of the mandate’s details: ETS, which imposes mandatory vaccination, vaccination verification, mask, and testing requirements, applies to most “large employers” (i.e., employers with 100 or more employees). Large employers must create and enforce a vaccination policy and, for employees who are not fully vaccinated, a weekly testing and mask wearing policy. Employers cannot require vaccinations for employees who need disability-related accommodations or religious exemptions. The vaccination mandate does not apply to employees who (i) do not work at a location with other employees, (ii) work from home, or (iii) work outdoors at all times. NOTE: Any exceptions to the vaccine requirement should be carefully documented. ETS also requires large employers to establish a procedure to determine and record the vaccination status of each employee, and to provide at least four hours of paid leave for each vaccination dose and a reasonable amount of paid sick leave for recovery. At present, the mandatory vaccination requirement does not include boosters. Large employers must also develop procedures that enable employees to promptly report positive COVID test results and to self-quarantine as required. OSHA had previously been prevented from implementing the Biden administration’s rule, which was initially set to be implemented on December 6. OSHA currently has the green light to begin enforcing the temporary standard. The agency is exercising enforcement discretion so long as employers are making reasonable, good faith efforts to come into compliance with the standard. With respect to all ETS requirements except the testing requirement, OSHA will not issue noncompliance citations prior to January 10, 2022. Citations will not be issued for noncompliance with ETS’s testing requirements prior to February 9, 2022. In early 2022, however, the Supreme Court will rule on the enforceability of ETS. Because the Court will either uphold the standard or halt the rule, employers must remain both flexible and prepared for either outcome, as the mandate landscape continues to shift. Important dates: January 10, 2022 – OSHA will begin enforcing the ETS requirements, exclusive of the testing requirement. February 9, 2022 – OSHA’s deadline for workers to be fully vaccinated or tested on a weekly basis. Recommended Next Steps: Employers should not be caught off guard and should prepare as if the rule is going to be upheld by the Supreme Court. Accordingly, the following steps should be taken:

Communicate with your workers that in early 2022 they may be required to be inoculated or submit to weekly testing and mask-wearing. The notice must (i) be written so that it can be clearly understood by your employees, (ii) provide information about ETS and policies and procedures established to implement ETS; (iii) include the CDC notice “Key Things to Know About COVID-19 Vaccines” which can be found at https://www.cdc.gov/coronavirus/2019-ncov/vaccines/keythingstoknow.html; (iv) describe your workplace protections against retaliation and discrimination; and (v) describe the criminal penalties for knowingly supplying false statements and/or documentation.
Draft compliant vaccination and testing policies.
Maintain a copy of each employee’s COVID-19 vaccine documentation and any COVID-19 test results. To ensure privacy, employers must carefully maintain the vaccination and testing records.NOTE: An employee’s vaccination and testing records must be available to such employee and to any individual who has the employee’s written consent.
Accurately track your workforce’s vaccination status. Employers must also be able, upon request, to provide to an employee or employee representative the aggregate number of fully vaccinated employees in the workplace and the total number of employees at that workplace.
Provide four hours of paid leave for each vaccination and a reasonable amount of time to recover.
Create procedures for employees to report positive COVID test results and self-quarantine as required.

If your organization has not yet implemented a vaccination policy, begin drafting one promptly. Employers that have already implemented vaccination and testing requirements should review their policies and procedures to ensure they are in compliance with ETS. OSHA has indicated that ETS is a proposed rule and as a result some aspects of the rule may change. In an abundance of caution, small employers, even though they are not subject to ETS, might want to adopt ETS standards to limit potential risk. Conclusion: Our stance remains steadfast: be prepared, be flexible, be safe. If you have any questions about the mandate or need assistance in crafting your workplace vaccination policy, please reach out to Katherine Brustowicz, David Gabor, or Ginny Peabody of The Wagner Law Group’s Employment Law Team.