Legislative Update

With a new President comes many new rules and laws. Combine this with a pandemic and the changes start to happen almost too quickly to keep track of. We’re here to help summarize some of the actions business owners should be aware of. Some have already been put in place and some are still being thought out by lawmakers.

  • The new relief and stimulus bill. At the time of this writing, this bill has not been approved by Congress and is still in negotiation, but business owners should be aware of what could be included in the final product. This bill is quite large and includes things such as a third stimulus payment, increased unemployment benefits, extending the eviction ban, funds to expand the coronavirus vaccine program, and funds to reopen schools.
    • How this may affect you: The biggest change would be the potential for an increase of the Federal minimum wage from $7.25 to $15.00/hour. While many states have implemented their own minimum wages, many still use the Federal minimum wage as a base payment. No state (with the exception of Washington D.C.) meets or exceeds a $15.00 minimum wage so this would be a significant change for businesses nationwide. At this time there are no details on how this rollout would happen, if there will be incremental increases over time, or what the timeline would look like.
  • The Biden administration is considering making the ABC test for 1099 contractors a Federal rule. The ABC test was implemented in California as a direct result of the recent boom in the gig economy. Under the ABC test, a worker must meet three requirements in order to qualify as an independent (1099) contractor: 1) The worker is free from control and direction of the hirer in relation to the performance of the work; 2) the worker performs work that is outside the usual course of the hirer’s business; and 3) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.
    • How this may affect you: Classifying a person as an independent contractor will be much more difficult. Many will need to become W2 employees.
  • On his first day in office, President Biden signed Executive Order 13988: Preventing and Combating Discrimination on the Basis of Gender Identity and Sexual Orientation. This Order requires various government agencies to review their guidance documents, policies, programs, or other agency actions to ensure they include gender identity and sexual orientation in their protections from discrimination and/or harassment.
    • How this may affect you: If you’re a Colorado employer, it will likely not be a drastic change since gender identity and sexual orientation are already protected classes under state law. We may see a nationwide increase in discrimination claims for people who may fall under these protected classes. Be sure to review your individual practices and potentially update any handbook policies to ensure they are all-inclusive for all protected classes.
  • A ban on non-compete and no-poaching agreements. Currently, most states allow for non-compete agreements between employees and employers, which prevent workers from leaving the company to work for a competitor. Biden would like to see these agreements banned nation-wide.
    • How this may affect you: If you’re a Colorado employer, there will not be a big change as non-competes are typically void with the exception of a few exclusions, such as protecting trade secrets. Employers in other states may need to review their policies and take stock of which employees are currently bound by non-compete agreements.