Every year seems to bring with it a new batch of legislation for the construction industry, and 2021 is no different.  For the construction industry, this can be complicated even further by industry-specific regulations. Keeping up with all the updates and changes can be difficult, but necessary if you want to stay compliant, and out of trouble in the upcoming year.

We created the following list of some of the more notable laws taking effect in 2021, including some California and construction-specific legislation you need to know.  You can also view a compilation of state-specific new employment laws if you want to take a closer look into your state.

General business laws

The following are general business legislation that every business owner needs to be aware of in the upcoming year.

Minimum Wage Laws

Many states have already placed minimum wage increases into effect, highlighting a national trend. In 2021, we see the trend continuing with minimum wage increases across multiple states. For instance, Florida will have an annual minimum wage increase starting in September. This is part of a larger, six year plan to increase the minimum wage to $15.00 per hour.

In California, employers with 25 employees or less must follow the new minimum wage order of $13 and companies with 26 employees or more must pay $14. Additionally, these Californian city and counties have also imposed local minimum wage increases:  

  • Belmont: $15.90  
  • Daly City: $15.00 
  • Hayward: $15.00 
  • Novato: $15.00 
  • San Diego: $14.00
  • Santa Clara: $15.65
  • Santa Rosa: $15.20 

You can also find the current minimum wages laws by state by visiting the U.S. Department of Labor or your state’s labor website.

Paid Sick Leave Laws

Starting on January 1, 2021, Colorado employers with 16 or more employees will have to offer paid sick leave, accrued up to 48 hours annually.  In 2022, this new law will apply to all employers regardless of size. Also going into effective in January, Maine employers with 10 or more employees have to offer 40 hours of Protected Time Off, per year, to its employees. The law allows employees to use this time off for any reason, including as vacation time.

Paid Family Leave Laws

Colorado is joining the trend of offering a statewide program for paid family and medical leave. The leave is funded through employer and employee payroll taxes, which start in January 2023 with benefits payable starting in 2024. Currently, eight other states and the District of Columbia already have state mandated paid family leave programs: California, Connecticut (effective 2022), District of Columbia, Massachusetts (effective 2021), New Jersey, New York, Oregon (effective 2023), Rhode Island, and Washington state.

Marijuana Legalization

Three additional states passed measures that legalized recreational marijuana, including Arizona, Montana, and New Jersey. Each of these states already had legal medical marijuana.  Additionally, South Dakota legalized both recreational and medical marijuana, while Mississippi legalized just medical marijuana. You’ll want to reexamine your organization’s policies to be in line with what’s required and allowed by your state. For instance, in Nevada, employers can test for marijuana but cannot take any adverse action based on test results. In New York City, employers cannot include marijuana in its pre-employment drug tests. Look for upcoming articles on this topic.

New laws specific to California

Businesses operating in the Golden State will want to be ready to comply with additional new laws going into effect in the new year. These include, but are not limited to the following pieces of legislation.

AB 2765 (Public works/Prevailing wage law)

Effective January 1, 2021, this  bill expands the definition of “public works” to include construction, alteration, demolition, installation or repair work done under private contract on a project for a charter school when the project is paid for with the proceeds of certain bonds. It’s an addition to 1720.8 of the current Labor Code.

SB 1383 (Expansion of CFRA Leave)

This expands CA Family Rights Act to companies that have as few as 5 employees. Requires up to 12 weeks of unpaid leave for covered reasons, expands qualifying reasons to having family called into active duty. Previous employer rights to limit/combine CFRA leave when both parents are employed and eliminates employer rights to limit reinstatement for “key employees”(i.e. those in the top 10% of wage earners in the company)

AB 2017 (Kin Care Leave)

This amends existing law, Labor Code 233 and permits employees to use  at least half of their annual accrual of employer-provided sick leave for “kin care” (family) reasons.  Also states that it’s entirely up to the employee to designate leave for this purpose.

Cal Savers  (Mandatory retirement program)

This is a mandatory retirement program created by legislation in 2016. CalSavers has tiered registration deadline based on the number of employees a company has:

  • Businesses with 50-plus employees – June 30, 2021
  • Businesses with five-plus employees – June 30, 2022

AB 2257 ( Dynamex Exemptions)

This changes the test for what it takes to be classified as an independent contractor. The update changes and expands the list and categories of exemptions from the “Dynamex” independent contractor classification test.  This is an update/revision/addition to AB 5 which you can read more about in this article.

AB 1512 ( Mandatory On-Duty Rest Breaks for Unionized Security Officers)

Effective Sept 30, 2020, this bill permits employers to require unionized security officers to take on-duty rest breaks. This includes staying on premises, on call and carrying and monitoring communication equipment during breaks. It states that if a break is interrupted, it can be restarted as soon as practical.

Tips for staying compliant

Knowing the law is only half the battle, you must also follow new legislation as it applies to your organization. This isn’t always easy, but the following tips can help you stay in the know and out of trouble. 

  1. Visit your state’s Department of Labor website and official local government sites to stay informed on what’s happening in your area. There may also be classes, webinars and other local resources that can help you better understand your legal obligations. The federal Department of Labor also provides a comprehensive list of links to every state’s labor-related resources. Bookmark it and make sure your team has it on their list of resources.
  2. Consider appointing someone from each department to help everyone stay updated on legislation that impacts their area of focus. For instance, select a member of your payroll team and put them in charge of facilitating compliance continuing education. They will be responsible for helping everyone stay informed on new laws and making sure your processes comply. It’s best to select a senior team member that has a good amount of experience. 

  3. Laws aren’t set in stone, so your processes shouldn’t be either. Revisit how you handle things several times a year, especially after new legislation has been passed. You’ll want to look at things such as reporting requirements, how you handle employee data, how long you store records and your processes for onboarding and terminating employees. And keep in mind, often times it’s the smaller administrative tasks that lead to compliance troubles. Take a look at these common problems and make sure your company is avoiding making costly mistakes.
  4. If you’re in doubt or have questions about how a law applies to you, get professional advice. Depending on the nature of the question, your payroll or benefits administration support service may be able to offer you guidance. You can also consult with a local attorney that specializes in labor law. Additionally, your state’s labor board might be willing to answer your questions, but chances are high that you’ll have a bit of a wait for a response. 

While this list might seem comprehensive, these are only some of the new laws going into effect in 2021. Your state and city may have additional legislation in place for you to follow. This is why it’s so important to make compliance a daily part of how you do business. Check local government sites, consult with professionals and actively work to say compliant so that you can have a trouble free new year!

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.