In late February, the Supreme Court of the United States ruled on an Alabama case involving unemployed workers’ efforts to seek unemployment insurance (“UI”) benefits.  At issue was the state of Alabama’s requirement that workers pursuing unemployment claims must first exhaust all available administrative processes before they could avail themselves of any remedies afforded by pursuing federal due process claims in state court.  The state’s unemployment compensation process required that anyone pursuing UI benefits must first file an application with the state’s Department of Labor.  If the benefits were denied, the unemployed worker was required to seek a hearing before the department’s Hearings and Appeals Division and then the Board of Appeals.

The state rules preclude state courts from weighing in on any appeals from these administrative decisions until the decisions are final and all administrative remedies have been exhausted.  The unemployed workers in this case filed suit in state court alleging federal civil rights violations and unlawful delays in processing of their benefits claims and in the administrative appeals process, itself.  These claims purported that the state had otherwise violated their procedural due process rights and the Social Security Act, violations of the 42 U.S.C. §1983.  42 U.S.C. §1983 allows people to sue state government officials for violating their civil rights under federal law.

In a 5 to 4 decision, the Supreme Court agreed with the group of unemployed Alabama workers, renewing their civil rights claims under 42 U.S.C. §1983.  Justice Kavanaugh noted that the administrative exhaustion rule created a “catch-22” for the workers, as it prevented the workers from pursuing relief in state court while waiting on state processes.

Justice Brett Kavanaugh wrote in the majority opinion: “[T]hat ruling created a catch-22: Because the claimants cannot sue until they complete the administrative process, they can never sue under §1983 to obtain an order expediting the administrative process. This Court’s precedents do not permit States to immunize state officials from §1983 suits in that way.”

The Court concluded that while the workers may proceed with the federal due process claims and remanded the case for further proceedings not inconsistent with its opinion, the Court did not take a position on the merits of the underlying claims.

PrestigePEO is here to help.

PrestigePEO is focused on supporting your business. If you have any questions about this ruling, or any other matters, please contact us.

In step with many of the new Trump administration decisions, the Acting General Counsel for the National Labor Relations Board has reversed course on a number of policy priorities of the former administration.  The Acting General Counsel, William Cowen, appointed by President Trump on February 3, 2025, has ushered in a new wave of priorities for the new administration, by enacting his first General Counsel Memorandum 25-05. General Counsel Memorandums are memos that outline the NLRB’s current policies and priorities on various employment related issues and influence related litigation and resulting NLRB rulings.

Memorandum 25-05 directly outlines that many of the prior interpretations of federal law would no longer be pursued, leaving many of the most influential memos from the previous administration no longer in effect.  Importantly, these include the opinions outlining that most non-compete agreements violate federal law, that stay or pay provisions are potentially permission (subject to state law), modifications to employer’s ability to require attendance at “captive audience,” and others.  While this memo does not change current labor law or the application of recent NLRB rulings, it will inevitably alter the course of future rulings.

Experts agree that change occurs slowly at the NLRB.  It is important for employers to note that this most recent memo is not binding law, and it will take time for the NLRB to reverse precedent already set in labor law decisions.

PrestigePEO is here to help.

PrestigePEO is focused on supporting your business. If you have any questions about these changes at the NLRB or any other matters, please contact your HRBP.

Ohio has become the most recent state to enact legislation that requires all employers to provide employees with written documentation outlining specific information each pay period, on the employee’s regular payday.  Effective April 9, 2025, each pay statement an employee receives from their employer must include:

• The employee’s name;
• The employee’s address;
• The employer’s name;
• Total gross wages earned by the employee during the designated pay period;
• Total net wages paid to the employee during the designated pay period;
• An accounting of the amount and purposes for each addition to or deduction from the wages paid to the employee during the designated period;
• The date the employee was paid and the pay period covered by that payment;
• And for hourly employees, the paystub must also contain the following:
  • Total number of hours worked in the designated pay period;
  • The hourly rate at which the employee was paid; and
  • The number of hours over 40 hours worked in one workweek.

Although employers can be penalized for failing to comply with each of these requirements, employees in Ohio do not maintain an independent cause of action against their employers, as some employees do in other states.  If an employer fails to provide the paystub, the employee must give ten (10) days for the employer to cure the violation and then are provided the opportunity to report the violation to the Ohio Director of Commerce, who in turn may issue a notice of violation to the employer which must be posted for ten (10) days. Employers are encouraged to begin preparing for these necessary changes in advance of the April 9, 2025 effective date.

PrestigePEO is focused on supporting your business and is here to help. All paystubs generated by PrestigePEO already meet these requirements.  If you have any questions regarding the Ohio Pay Stub Protection Act requirements, please contact your HRBP for help.

In Illinois, The Equal Pay Registration Certificate (EPRC) is a requirement under the Illinois Equal Pay Act of 2003.  Private employers with one hundred (100) or more employees working in the state, including fully remote workers who report to management in Illinois, and file an EEO-1 report   must apply for and obtain an EPRC from the Illinois Department of Labor (IDOL) to certify compliance with equal pay laws. After receiving a first Equal Pay Registration Certificate, businesses must recertify every two (2) years from the date the last certificate was issued.

Employers who are applying for EPRC certification will now have to provide the following data which has not been reported in the past: hourly/salary status, base hourly rate for hourly workers, and to answer whether employees are covered by a collective bargaining agreement.

Due to the changes in the required reporting data, an updated data template for EPRC applications is anticipated to be loaded onto the IDOL’s EPRC website by March 31, 2025. All employers who were otherwise required to recertify in early 2025, from prior certificate received, have been given a new deadline of March 31, 2025 as updates were being made to the submission portal.  Employers are encouraged to make necessary preparations to timely comply with the Illinois EPRC application process, especially those employers required to file an application in 2025.

PrestigePEO is here to help.

PrestigePEO is focused on supporting your business. If you have any questions about the Illinois Pay Data Reporting requirements, please contact your HRBP.

The Iowa Legislature recently passed and on February 28, 2025, Iowa Governor Reynolds signed new legislation, enacting revised provision to the Iowa Civil Rights Act which goes into effect on July 1, 2025.  This new law ends civil rights protections based on gender identity.  The Iowa Civil Rights Act prohibits discrimination in employment, education, housing, credit, and public accommodations and will no longer include protection against discrimination based on gender identity.

Important for employers to remember, however is gender identity remains a protected characteristic under Title VII of the Federal Civil Rights Act of 1964.  All employers with at least fifteen (15) employees are covered by Title VII, which prohibits discrimination in employment.  Additionally, many municipalities in Iowa also expressly prohibit discrimination on the basis of gender identity.  Employers are encouraged to review and update all related policies to ensure compliance with all federal, state, and local laws.

PrestigePEO is here to help.

PrestigePEO is focused on supporting your business. If you have any questions regarding this new legislation or any other recent legislation, please contact your HRBP.

As another reminder regarding the upcoming California Pay Data Reporting cycle, California employers are entering the third year of the expanded California Pay Data Reporting requirements.  This annual Pay Data Report is due by May 14, 2025.  Employers are encouraged to start planning now for this deadline, to ensure compliance with the increasingly complex requirements.

This reporting requirement applies to all private employers of who “regularly employ” 100 or more employees and at least one (1) employee in California and/or employers who hired 100 or more workers through labor contractors and at least one (1) in California.  Employers will be required to submit Employers Reports and Labor Contractor Reports if they fall under both criteria and for employers with multiple establishments, a report must be submitted for each establishment. For employers with multiple legal entities and multiple establishments, the report must be submitted by legal entity for each establishment.

The California Pay Data reporting requirements are very fact specific.  Employers are encouraged to work with their various stakeholders soon to ensure that the necessary time is considered when planning for this May 14, 2025, deadline.

PrestigePEO is here to help.

PrestigePEO is focused on supporting your business. If you have any questions regarding the California Pay Data Reporting requirements, please contact us.

In February 2025, the Governor of Alabama signed Senate Bill 79, also known as the “What Is a Woman Act,” officially defining sex as binary male and female under state law. The act, which will take effect on October 1, 2025, clarifies the legal classification of sex with implications for businesses and public entities.

The act establishes that individuals will be classified as either male or female based on biological characteristics observed or clinically verified at birth. Additionally, public entities are permitted to establish single-sex facilities or programs when privacy, safety, or fairness are at stake. Although the law primarily affects public entities, private employers in Alabama should be aware of its potential impact, particularly regarding reporting data, workplace facilities, and company policies.

One of the most significant impacts of the new law will be on how employers collect and report demographic data. Employers who are required to report sex-based information to state or federal agencies may need to adjust their data collection practices to reflect the law’s binary classification of sex. For example, businesses that track employee diversity for reporting purposes or submit data to comply with federal regulations like EEO-1 forms may need to ensure that all employees are classified strictly as male or female in their records. Employers may need to review and update systems to ensure compliance with the new law’s requirements.

The law allows public entities to establish facilities designated for males and females, such as restrooms, locker rooms, and changing areas, based on biological sex. While the law directly affects public employers, private employers may assess how this impacts their facilities and policies while still upholding their obligations under workplace discrimination laws. Employers should also be mindful of how this law might influence workplace culture and employee concerns about inclusivity. Adjustments to policies regarding access to these spaces, especially for transgender or gender-nonconforming employees, may be necessary to balance legal compliance with a commitment to fostering a diverse and inclusive work environment.

It is also essential to continue complying with federal anti-discrimination laws such as Title VII of the Civil Rights Act, which prohibits discrimination based on sex, including gender identity and sexual orientation. The law’s new binary classification could lead to confusion or challenges around how specific policies are interpreted, so staying updated and adjusting practices to prevent legal risks is crucial.

Alabama businesses should take proactive steps to ensure compliance with the new law by reviewing internal policies and practices regarding data collection, male and female-designated facilities, and employment practices. Determine if any changes are necessary to align with the new law while maintaining compliance with federal anti-discrimination regulations.

While the act is set to go into effect on October 1, 2025, legal challenges may arise before that date. Several groups, including civil rights organizations and those advocating for transgender rights, have expressed concerns that the law could lead to discrimination. Should such challenges be filed, the law could face delays or modifications depending on how the courts rule. However, at this point, the law is set to take effect unless it is blocked or amended through legal action.

PrestigePEO monitors significant legal changes to help our clients adapt accordingly. For specific questions or support, contact your HR Business Partner.

Recent legal developments have created uncertainty around diversity, equity, and inclusion (DEI) initiatives, particularly for businesses that contract with the federal government. This year, the federal government scaled back its support for DEI initiatives and issued executive orders affecting federal agencies’ diversity, equity, and inclusion (DEI) programs. Since then, a federal court has temporarily blocked enforcement of specific provisions that restrict certain DEI initiatives. Meanwhile, attorneys general from numerous states have issued guidance on how businesses can maintain legally compliant DEI initiatives. While primarily targeting federal entities, these directives may influence private employers, especially those with federal contracts, to reassess their DEI strategies.

Key Considerations for Employers

With ongoing legal and regulatory changes, businesses should assess their DEI programs to ensure they align with federal and state laws. State-level guidance may differ, so employers should be aware of regulations that apply in their specific locations.

Federal and state anti-discrimination laws prohibit race- and gender-based quotas in hiring and promotions. Employers should ensure their DEI initiatives focus on expanding access and opportunity rather than mandating specific outcomes.

Employers can continue to promote diversity and inclusion while implementing legally sound DEI strategies by:

• Broadening recruitment efforts to attract diverse talent pools.
• Using structured, skills-based hiring processes to mitigate bias.
• Offering leadership development and mentorship opportunities equitably.
• Providing training on topics such as inclusive leadership and bias awareness.
• Maintaining inclusive workplace practices to help attract and retain top talent.

Moving Forward in the Evolving Landscape

The blocked executive orders may still face appeals or revisions, and other legal challenges related to DEI policies are ongoing. Employers doing business with the federal government should stay updated on compliance obligations tied to grants and contracts. While legal challenges continue, companies can foster inclusive workplaces by focusing on lawful, well-structured DEI initiatives.

Given the evolving landscape, PrestigePEO monitors the situation and will help keep your business informed and proactive.

Last year, Maine passed a law that included creating a Paid Family and Medical Leave (FAMLI) program with the intention for benefits to begin in May 2026. Employer contribution premiums started in January 2025, with the requirement for quarterly submission reports relating to premiums and contributions. Under Maine’s FAMLI law, there is a section that allows employers to use private insurance companies, in lieu of the state plan, to fulfill the employer obligations under the law; there are certain requirements a private plan must satisfy to qualify as a private plan substitution.

Rather than leaving businesses guessing, Maine’s Department of Labor announced twelve (12) private PFML plans that meet the necessary program requirements and that employers may use as an alternative to the state plan. Employers still need to apply for and receive approval for the substitution of private plans. Starting April 1, 2025, employers can submit their applications for private plan substitution approvals through the state’s Paid Leave Portal. Additionally, it is recommended that if a business intends to use a private plan to satisfy its obligations under Maine’s FAMLI law, it should apply for the private plan substitution approval as soon as the business is able. Once the private plan is approved, businesses will no longer need to pay the state plan premiums.

The Maryland Department of Labor (DOL) has proposed delaying the Paid Family and Medical Leave Insurance. Employee contributions were scheduled to start July 1, 2025, and then benefits would be available to employees as of July 1, 2026. However, the Maryland DOL is now looking to postpone the start of employee contributions to January 1, 2027, and benefits to begin January 1, 2028. For the shift to become official, legislative action is required. State Senator Stephen Hershey introduced Senate Bill (SB) 355, which is pending with the state legislature. The Maryland DOL has referenced the uncertainty caused by employment-related Executive Orders issued by the Trump Administration.

PrestigePEO will continue to monitor the progress of SB 355 and the impacts it will have on employers.

In the latest update from Michigan, the legislature finally passed Senate Bill 8 and House Bill 4002, solidifying the amendments to the Earned Sick Time Act (ESTA) and the Improved Workforce Opportunity Wage Act (IWOWA).

House Bill 4002 – Changes Enacted to ESTA[1]

As of February 21, 2025, Michigan enacted House Bill 4002, solidifying major changes to ESTA impacting employers throughout the state[2]. With all the changes to ESTA, it is also important to note that ESTA allows for employers to use their PTO policy to comply with the ESTA requirements.

• Small Business:
  • Under ESTA, an employer is considered a small business if it has ten (10) or fewer paid workers during any given week.
  • Small businesses are required to comply with ESTA beginning October 1, 2025.
  • Unlike the requirements for businesses with more than ten (10) employees, small businesses are not currently required to provide front-loaded sick time, to allow accrual of earned sick time, or to track and calculate the accrual of paid earned sick time.
  • Small businesses are required to allow employees to use up to forty (40) hours of paid sick time in any given year.
• Covered Employee no longer includes those considered statutorily as an unpaid trainee or unpaid intern, employees who fall under the Youth Employment Standards Act, and individuals who work for an employer with an employer policy allowing individuals to set their own hours and the employer policy also prohibits the employer from taking adverse action against the employee for not setting minimum working hours.
• Updated Waiting Period: Under a previous version of ESTA, there was a ninety (90) calendar day waiting period from the date of hire to use accrued earned sick time. In the current version, individuals hired after February 21, 2025, by businesses using the accrual method can be required to wait one hundred and twenty (120) calendar days before using their accrued earned sick time.
• Foreseeable vs. Unforeseeable Leave: Employers can require seven (7) days advance notice for employees whose need for ESTA leave is foreseeable. If the need for ESTA leave is not foreseeable, employers are afforded two types of notice options; they can require notice to be provided as soon as practicable or in accordance with the employer’s sick time policy. If an employer elects to utilize the latter option, there are additional applicable requirements to satisfy ESTA. The policy must be in writing, a copy of which is provided to the employee, it must contain the company’s procedures for how employees are to provide notice, and the policy allows for the employee to notify the employer of their need for ESTA leave once the employee is aware of their need to take leave.
• Pay Rate for Employees Taking Leave Under ESTA: There is no one pay rate for earned sick time, but rather it is based on the individual seeking leave and their base wage. If the base wage (or their hourly wage) is greater than the then current state minimum wage under IWOWA, the ESTA pay rate will be the employee’s base wage. If the employee’s base wage is not greater than minimum wage, the base pay rate would be the greater of the two, the then current minimum wage.
• Employee Carryover of Accrued Paid Sick Time: Employees may carryover unused accrued paid sick time from year to year, but employers are allowed to cap the carryover amount to seventy-two (72) hours. Small businesses are allowed to cap carryover to forty (40) hours.
• Businesses that Provide 72–Hours of Earned Sick Time for Immediate Use: Under this new version of ESTA, prorating earned sick time hours is explicitly allowed. For for businesses that elect to provide 72-hours of earned sick time hours for immediate use, and for small businesses that allow 40-hours of earned sick time hours for immediate use, the business or small business is not obligated to allow carryover of unused earned sick time. Businesses and small businesses that fall into this category are also relieved from the requirement for accrual tracking as well.
• Part-Time Employees & Frontloaded Earned Sick Time: In the updated version of ESTA currently in place, employers are allowed to prorate frontloaded earned sick time hours to part-time employees. There is a notice requirement by employers that requires written notice of the amount of hours expected to be worked by the part-time employee in a year and then the prorated amount of hours.
• Allowable Sick Time Increments: Employers are provided a choice between allowing sick time to be used in either one (1) hour increments or the smallest increment the employer uses for other employee time off/absences.
• Re-hires and Accrual Balances: The re-hire provision under ESTA to reinstate previously accrued but unused earned sick time now only applies to those re-hired within two-months. If the employer has already paid out the accrued but unused time during the initial employee termination, this provision does not apply.
• No Right to File Private Cause of Action: Employees may only file administrative complaints for ESTA violations with the Department of Labor and Economic Opportunity (LEO).
• Employer Fines: Employers that fail to provide earned sick time to an employee otherwise entitled to it can be fined up to eight (8) times the employee’s regular hourly wage, in addition to other fines allowable under ESTA.
• Improper Use of ESTA: Employers are allowed to take adverse employment action (disciplinary action) against employees who misuse leave under ESTA and use leave for a purpose not covered under the act. Additionally, employers are also allowed to discipline employees for failure to adhere to the notice requirements.
• ESTA & Collective Bargaining Agreements: If a Collective Bargaining Agreement (CBA) pre-dates February 21, 2025, and has conflicting provisions compared to ESTA requirements, the CBA will control until the CBA expires.
• Updated Notice Requirement: The notice requirement has been pushed from February 21, 2025 to March 23, 2025 for employers to notify employees of their employer’s chosen benefit year (employers may elect for the benefit year to be fiscal year, calendar year, employee hire date, etc.); the terms employees are allowed to use their earned sick time under ESTA; the amount of sick time that ESTA requires to be provided to employees under ESTA; an employee’s right to file an administrative complaint with LEO for ESTA violations; and that retaliation is prohibited against employees for requesting or using earned sick time leave.

With all of these updates, employers with employees in Michigan should, review their handbook polices and make updates where necessary and should provide notice to employees pursuant to the law. Prestige is here to assist its client’s with navigating these changes and with updating employee handbooks.

[1] https://www.michigan.gov/leo/-/media/Project/Websites/leo/Documents/WAGE-HOUR/LEO-Sick-Time-Act-FINAL.pdf

[2] https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/paid-medical-leave-act

A new bill advancing through the New York State Legislature could significantly alter the way employers handle severance agreements. The No Severance Ultimatums Act passed the state Senate on March 4 and now awaits review in the Assembly. This legislation would impose stricter requirements on how severance agreements are presented and executed, aiming to prevent employers from pressuring employees into signing unfair terms.

Under the proposed law, all employees in New York would be entitled to at least 21 business days to review a severance agreement before signing. Additionally, once an employee signs the contract, they would have seven days to revoke it, and it would not become effective until that revocation period expires. Employers would also be required to notify employees of their right to consult an attorney before signing. If passed, the law would take effect immediately. Employees could waive the 21-business-day review period and sign the agreement earlier, but the seven-day revocation period would remain mandatory.

Federal and state laws provide similar protections, but only in specific circumstances. Employees over 40 already receive a 21-day review period and seven-day revocation period under the Older Workers Benefit Protection Act (OWBPA). New York law also grants these rights to employees resolving discrimination, harassment, or retaliation claims when the agreement includes a non-disclosure clause. The proposed law would extend these protections to all employees, regardless of age or claim type. Additionally, the review period under the new law would be counted in business days rather than calendar days, effectively giving employees more time to evaluate their agreements.

If the bill is enacted, employers must update their severance agreements and internal processes to align with the new requirements. Failure to comply could result in invalid contracts, increasing the risk of legal challenges. Employers should also review their policies to ensure they are prepared for changes.

PrestigePEO will continue monitoring developments and providing updates as the legislative process progresses. Please contact your HR Business Partner for further information and support.

Virginia lawmakers have passed a bill to prevent discrimination in AI-driven decision-making, but it still awaits the Governor’s signature. If signed, the law would take effect July 1, 2026, adding new compliance requirements for businesses using AI in hiring, finance, healthcare, and other key areas. It is unclear whether this law will take effect. However, businesses may want to prepare for potential compliance obligations.

If enacted, the law would require businesses to evaluate AI for bias by conducting risk assessments and documenting AI decision-making processes. Employers must also ensure transparency by informing individuals when AI is used in consequential decisions and providing an appeals process. Additionally, businesses would be expected to follow compliance standards by aligning with federal AI risk management frameworks to demonstrate responsible AI use. The bill applies only when AI is the principal basis for a decision, excluding lower-risk tools like resume-screening software.

Taking proactive steps now, such as auditing current AI tools to identify potential bias, implementing AI governance policies to establish oversight, and ensuring transparency in AI-driven decision-making to comply with emerging regulations, can help mitigate risk.

PrestigePEO is here to help your business maintain compliance and stay ahead of the curve. Please contact your HRBP with any questions you may have.

A recent Washington Supreme Court ruling has made it more difficult for employers to prevent low-wage employees from working second jobs, even for competitors. The decision clarifies that broad anti-moonlighting policies and duty of loyalty provisions will be heavily scrutinized and may not be enforceable.

Since 2020, Washington law has restricted non-compete agreements and employer policies that prevent low-wage employees earning less than $33.32 per hour or $69,305 annually in 2025 from taking additional jobs. While the law allows some restrictions based on an employee’s duty of loyalty, courts had not previously ruled on how far employers could go in limiting outside employment.

That changed with the case of David v. Freedom Vans LLC, where the Washington Supreme Court ruled that broad prohibitions on moonlighting contradict the law’s intent. The court determined that while the duty of loyalty still applies, it cannot be used to justify blanket restrictions on low-wage workers seeking additional income.

Employers who impose overly broad restrictions could face significant legal consequences, including statutory damages of at least $5,000 per affected employee and potential class-action lawsuits. To stay compliant, businesses should identify which employees fall under the low-wage threshold and review employment agreements and company policies for any broad anti-moonlighting language.

PrestigePEO is here to help. Please contact your Human Resources Business Partner for assistance with updating policies and remaining compliant.