With a new administration taking office on January 6, there may be some significant shifts in the legislative agenda. While we wait to see how that shakes out, we will be ringing in 2025 with new federal, state, and local employment law requirements in the new year. Key trends at the state level affect employees’ leave rights, personal data privacy, and the salary threshold for exempt employees. Review the following developments to prepare for needed updates to policies and procedures. The Mental Health Parity and Addiction Equity Act (MHPAEA) goes into effect January 1. This federal law requires health insurance plans to provide mental health and substance use disorder (MH/SUD) benefits on par with medical/surgical benefits. Employers offering group health plans that include these benefits must ensure compliance with the MHPAEA. MHPAEA applies to self and fully insured private-sector and public-sector employer group health plans with more than 50 employees, small group employers as required by the Affordable Care Act, and individual health insurance. Employers must ensure that MH/SUD benefits are no more restrictive than medical/surgical benefits in: Financial requirements (deductibles, copayments, coinsurance, and out-of-pocket maximums for MH/SUD must be comparable to those for medical/surgical benefits), Quantitative Treatment Limitations or QTLs (such as limits on the number of visits or days covered), and Non-Quantitative Treatment Limitations or NQTLs (these include rules like prior authorization requirements, medical necessity standards, and provider network admission criteria). Employers should work with their insurance carriers or plan administrators to compare financial requirements and treatment limitations for MH/SUD and medical/surgical benefits. Employers must provide, upon request, information about coverage criteria for MH/SUD and medical/surgical benefits. Beginning December 23, 2024, the HIPAA Privacy Rule Amendment prohibits covered entities from using or disclosing PHI related to reproductive health care for non-health care purposes without explicit authorization. HIPAA does not specifically apply to employers when they are functioning in the role of employer; however, if an employer sponsors a health care plan for its employees, it may be required to comply with the Privacy Rule since the health plan is a covered entity. A group health plan with fewer than 50 participants that is administered solely by the employer is not a covered entity and is exempt from the Privacy Rule requirements. For this purpose, participants include employees who are eligible to enroll in the plan, not just those that are enrolled. Reproductive Health PHI includes information related to abortion services, fertility treatments, contraception, pregnancy-related care (e.g., miscarriage management, prenatal care), and other sensitive reproductive health services. Limit access to reproductive health PHI to authorized individuals who need it to perform their duties. Review and update HIPAA policies to reflect the prohibition on disclosing reproductive health PHI and ensure policies explicitly prohibit disclosures to law enforcement, third parties, or others without patient authorization unless required by law. Policies should also prohibit the use of reproductive health PHI for employment decisions or other non-health-related purposes. Effective January 1, 2025, the business vehicle standard mileage rate is increased to 70¢ per mile (up from 67¢ per mile in 2024). The rate applies to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. In addition, the vehicle valuation / company fleet average value / fixed and variable rate allowance (FAVR) limitation is reduced to $61,200 (from $62,000 in 2024). Minimum wage increases will affect more than 20 states and dozens of localities in the new year. Effective January 1, 2025, the minimum salaries for executive and administrative employees exempt from New York’s minimum wage and overtime requirements increase: From $1,200.00 per week to $1,237.50 per week for employers in New York City, Nassau County, Suffolk County and Westchester County; and From $1,124.20 per week to $1,161.65 per week for employers in the remainder of New York. Additionally, the minimum wage for non-exempt workers increases to $16.50 per hour for employers in New York City, Nassau County, Suffolk County and Westchester County and $15.50 per hour for employers in the remainder of New York. Also effective January 1, 2025, New York requires covered employers to provide paid leave for health care services related to an employee’s pregnancy. In addition to the existing sick leave entitlement under the New York Sick and Safe Leave Law, an employee can use up to 20 hours of paid prenatal personal leave (PPPL) per year. Paid prenatal personal leave means leave taken for health care services related to an employee’s pregnancy, including physical examinations, medical procedures, monitoring, testing and discussions with a health care provider related to the pregnancy. All employers must provide PPPL, including employers with four or fewer employees and a net income of $1 million or less that are only required to provide unpaid sick leave. On September 5, 2024, Governor Kathy Hochul signed the New York Retail Worker Safety Act into law. Covered retail employers have until March 4, 2025 to adopt polices and training for workplace violence prevention. Specifically, the Act requires a workplace violence prevention policy that includes: Identification of risk factors (e.g., late-night hours, cash handling, working alone). Preventative measures and reporting systems for incidents. Information on legal remedies available to victims. Anti-retaliation provisions for employees reporting concerns. The Act also requires a workplace violence prevention training program providing, among other things, information on the requirements under the law, de-escalation techniques, active shooter drills, emergency procedures, including site-specific exit routes, and use of security alarms and panic buttons. Training must be conducted upon hire and annually. Effective January 1, 2027, covered retail employers with 500 or more retail employees nationwide must provide access to “panic” buttons throughout the workplace to summon immediate assistance from law enforcement. After 5 years, New York’s COVID-19 Paid Sick Leave will expire on July 31, 2025. After July 31, 2025, employees will need to use existing paid leave, such as New York State’s Paid Sick Leave to manage care or isolate for COVID-19. Finally, many jurisdictions update workplace posters annually, so take time now to ensure you are using the most current version of any applicable federal, state, and local posters. These recent and upcoming employment law developments present a great opportunity for employers to review and update their employee handbooks, check job advertisements to ensure compliance, and review hiring practices related to employee policies and wage practices. Contact ESC if you need assistance with your compliance efforts and stay tuned for ongoing compliance updates on the ESC blog.