Legal Update 2023

Mid-Year Legal Update

There have been a number of employment law changes in the first half of 2023, so let’s take a look at what has changed.

Federal Changes:

The Pregnant Workers Fairness Act (PWFA) went into effect on June 27, 2023. It is part of Title VII of the Civil Rights Act of 1964 and requires covered employers to provide reasonable accommodations when an employee has known limitations due to pregnancy, childbirth, or related medical conditions, unless an accommodation would cause an undue business hardship.

PWFA applies to employers with 15 or more employees, just as Title VII does. Under PWFA, the employee must make their limitations known to the employer and includes both physical and mental limitations, even if those limitations do not meet the definition of disability under the Americans with Disabilities Act. Employers are not required to accommodate perceived limitations. PWFA utilizes the same definition of a “qualified individual” as ADA does, meaning that the employee must be able to perform the essential functions of the position, with or without accommodation. However, a major difference from ADA is when those essential functions can be performed. Under PWFA, an employee is qualified if:

any inability to perform an essential function is for a temporary period;
the essential function could be performed in the near future; and
the inability to perform the essential function can be reasonably accommodated

Religious Accommodations

The Supreme Court ruled in the case of Groff v. DeJoy (2023) that when determining religious accommodations an employer must meet more than a de minimis standard for undue business hardship. Up until this decision, the standard for undue business hardship under religious accommodations was a minimal business impact. Now employers must show that the accommodation would be costly, would compromise workplace safety, infringe on the rights of other employees, impacts workplace efficiency, or causes other employees to do more than their share of hazardous or burdensome work.

Severance Agreements

The National Labor Relations Board (NLRB) issued a memo in March to provide guidance in response to their decision in McLaren Macomb in which the NLRB returned to their position that employers violate the NLRA when they offer severance agreements that include a broad waiver of rights. This determination is retroactive and voids the terms of severance agreements previously executed if they include a broad waiver of rights.

I-9 Updates

The revised I-9 Employment Eligibility Verification Form was released for use beginning August 1, 2023. The new form condenses the required information from two pages down to one page. In addition, due to the resulting employment of more remote workers as a result of COVID, and the continuation post-COVID to hire remote workers at a high rate, USCIS has made revisions to the process they implemented during COVID to continue to allow employers a method by which to verify employment documents remotely.

Alabama Income Tax Credit

In June, the Alabama Legislature passed a bill to encourage non-exempt workers to work overtime. Under this bill, for the tax year beginning January 1, 2024 full-time non-exempt employees who work overtime will not be taxed on the overtime wages earned. Employers will be required to report overtime wages earned to the state either quarterly or annually.