It’s that time of year again when businesses reflect upon what worked and what needs refining as you head into 2022. In today’s business climate, strategic planning now includes contingencies for COVID and supply chain issues. With many local, state and national law changes coming into effect on January 1, leadership must also be aware of any HR implications. That’s where we come in. One of the many ways we help our clients is by monitoring and alerting them to legislative changes that impact HR. Let’s dig into what’s happening in 2022.
Wage changes
There are eleven states with confirmed minimum wage increases for 1/1/2022 including Arizona, California, Florida, Illinois, Maine, Maryland, Massachusetts, Nevada, New Jersey, Ohio and Virginia. Here in Illinois, our minimum wage will be increasing from $11.00 to $12.00 an hour. Make sure payroll and taxes are scheduled to update and research if wage increases impact benefits. Keep in mind, there are seventeen states with pending minimum wage legislation, so don’t assume your state isn’t impacted.
On a federal level, there are wage changes as well for employees who work on a federal contract. For existing federal contracts, the minimum wage will increase to $11.25 per hour for non-tipped and $7.90 per hour for tipped employees on 1/1/22. Any new, renewed or extended contracts, minimum wage will be $15 per hour starting on 1/30/22.
Illinois Freedom to Work Act
Beginning January 1, 2022, it will be more difficult for employers to enforce restrictive covenants against Illinois employees. Previously the Illinois Freedom to Work Act was geared to low-wage employees, but in August there was an amendment passed that expands protections to any employee who earns $75,000 or less per year (non-compete) and $45,000 or less per year (non-solicit). With US Census reporting Illinoisans earn an average of $36,038 per year, this will have a broad impact.
From an employer’s perspective, non-compete and non-solicit agreements were developed to protect business interests. Under the new statute, employers must be able to prove that they provided adequate consideration to each employee asked to sign one of these covenants. For instance, making sure the agreement does not impose undue hardship on the employee and it is no greater than required to protect employer’s “legitimate business interests.”
- Employers should revise current agreements to shield against potential litigation since the Illinois Attorney General is authorized to investigate and sue any employers that violate the Act
- Starting January 1, employers must advise employees to consult with an attorney before signing either the non-compete or non-solicit covenants. This must be in writing.
New wage reporting requirements
For any employer with more than 100 employees, a new amendment in the Illinois Equal Pay Act (EPA) requires filing an Annual Employer Information Report EEO-1 with the EEOC. This biannual report must include:
- Wage record: pay data and details for all employees from the prior calendar year
- Compliance statement: certifying your business complies with equal pay laws
Violations come with a steep fine of up to $10,000 per employee. There is a ramp up period, but we recommend conducting a wage audit now and make sure your team is prepared to gather all required information for the report.
Increased employment protections
There was an amendment to the Illinois Victims Economic Security and Safety Act (VESSA). VESSA originally allowed employees who are victims of sexual, domestic or gender violence to take up to twelve (12) weeks of unpaid leave. Employees are also eligible for leave and job protection if the violence was committed against a family or household member. In August, VESSA’s qualifying list of reasons was expanded to now include “crimes of violence.” Employers are required to retain all qualifying documentation provided to them pursuant to VESSA in the “strictest confidence.” With the amended VESSA going into effect on January 1, 2022, we recommend you review leave policies to ensure compliance.
MidwestHR is a leading Chicago PEO in Illinois (professional employer organization). Clients outsourcing HR to our team of experts so they can focus on growing their company. Our a la carte pricing allows clients to choose if they want us to manage all or some of the HR functions including benefits, HR guidance, payroll and taxes, training, workers comp, retirement, hiring/layoff/firing and more. Having partnered with clients for over twenty years, we monitor legislation that may impact businesses and proactively alert them of any expected impact. Give us a call at 630-836-3000 to learn more.
