Major Changes to Non-Competes
Massachusetts passed a new law that will limit the enforceability of non-compete agreements entered into on or after October 1, 2018. Some highlights of the new law include: (1) the law applies to employees who live or work in Massachusetts, and to independent contractors; (2) non-competes are prohibited for employees classified as non-exempt under the Fair Labor Standards Act; (3) non-competes are not enforceable against employees who are terminated without cause or laid off; (4) employers must pay employees during the non-compete period either 50% of their salary (referred to as “garden leave” pay) or “other mutually agreed upon consideration”, which is not defined; (5) the non-compete cannot be for a period of longer than one year, with limited exceptions; and (6) non-competes signed after employment has commenced must be supported by “fair and reasonable consideration”, which is not defined. There are numerous other requirements. Please contact us should you require additional information.
Paid Family and Medical Leave
Starting January 1, 2021, eligible employees will be entitled to take up to 20 weeks of paid medical leave to attend to their own serious medical needs, up to 12 weeks of paid leave to care for a sick family member or a newborn, and up to 26 weeks of paid leave to care for a covered service member. The paid leave program will be administered by the state of Massachusetts and funded through a 0.63% payroll tax, which the employer and employee will split. Employees will be required to cover 100% of the contributions for family leave, and 40% of the contributions for personal medical leave. However, employers with over 25 employees must pay 60% of the contributions for personal medical leave. Employer and employee contributions will begin on July 1, 2019.
Before receiving payment during leave, the employee will have to take seven days of unpaid leave. Thereafter, the employee will be eligible for a weekly paid leave equal to 80% of the employee’s wages (capped at 50% of the state average weekly wage) plus 50% of their wages beyond that amount (capped at $850 per week), which is adjusted annually to remain at 64% of the state average weekly wage.
There are a number of other administrative and notice requirements. Please contact us should you require additional information regarding these requirements.
Increased Minimum Wage
Beginning January 1, 2019 and gradually increasing over the following five years, the hourly minimum wage in Massachusetts will increase from $11.00 to $15.00 and the tipped hourly minimum wage will increase from $3.75 to $6.75.
Sweeping Sexual Harassment Laws
The New York state budget that was enacted on April 12, 2018 includes numerous requirements concerning sexual harassment. The new requirements: (1) extend protection against sexual harassment to non-employees, including contractors, subcontractors, vendors and consultants; (2) prohibit employers from requiring employees to arbitrate sexual harassment claims; (3) prohibit employers from including non-disclosure provisions in settlement agreements for sexual harassment claims unless the employee prefers otherwise and certain other requirements are met; and (4) mandate all employers, effective October 9, 2018, to adopt a sexual harassment policy containing certain specific provisions, and to conduct annual interactive sexual harassment training for all employees covering certain specific topics.