Legal and Labor Relations Newsletter - Summer 2025

This Labor Relations and Legal Update highlights some salient changes that recently took effect or will take effect shortly. The material recapped in this newsletter is general information we are providing as a courtesy on subjects that may be of interest to you. We encourage you to consult with your legal advisors about the applicability of these changes and updates to your organization’s specific circumstances, and how best to handle them.

Legal Updates:  Federal

U.S. Supreme Court Equalizes Treatment of Reverse Discrimination Claims with Other Types of Discrimination Claims

On June 5, 2025, the U.S. Supreme Court unanimously resolved a disagreement among certain lower courts under federal anti-discrimination law that reverse discrimination claims (i.e., alleged victim is part of a majority group instead of a minority group within the employer’s workforce) should not require a heightened burden of proof compared to other discrimination claims.  In the case, the plaintiff was a heterosexual woman who sued her employer claiming that she was passed over for promotion and subsequently demoted in favor of other employees who were not heterosexual.  The trial court and the appeals court ruled against the employee using additional proof elements just for a majority member victim trying to prove illegal discrimination. The heightened proof involved the majority member victim having to prove – in addition to the standard elements of a discrimination claim - that a member of the relevant minority group made the contested employment decision against the majority member victim and that statistical evidence showed inclination of employer discrimination against the majority group.   

The Supreme Court unanimously ruled though that there is nothing in the federal anti-discrimination law under review that would permit courts to impose upon plaintiffs a higher burden of proof simply by being a member of a majority group and thus the same standard of proof would apply to all discrimination claims regardless of whether the plaintiff was a member of a minority or majority group in the employer’s workforce.  The Supreme Court’s decision is available here.  

Income Tax Deduction for Federal Law Overtime Under One Big Beautiful Bill Act

The recently passed omnibus federal tax and spending cuts legislation contains a federal income tax deduction on the premium portion for weekly overtime hours under federal law.  The deduction is retroactive to January 1, 2025 for covered federal overtime premiums and will last for the 2025 through 2028 tax years.  Because the tax benefit is a deduction, income tax withholding will still occur on the in-scope federal overtime wages, but the employee will be able to apply for a refund with their income tax return.  The 2025 W-2 and future W-2s will contain a box reporting the deductible premium portion of federal overtime wages paid by the employer.  In-scope federal overtime premium wages will still be subject to FICA and FUTA payroll taxes.  The deduction only applies to the premium portion of federal weekly overtime (example, with $20 standard time and $30 overtime, only the $10 overtime premium portion) and, therefore, does not apply to daily overtime or double time nor other overtime premiums that are not required under federal law. 

Legal Updates:  California 

California Publishes “Survivors of Violence and Family Members of Victims Right to Leave and Accommodations” Notice

On July 1, 2025, the California Civil Rights Department (CRD) published the Survivors of Violence and Family Members of Victims Right to Leave and Accommodations notice (the “Notice”) that is required by AB 2499 – a law that went into effect on January 1, 2025.  More specifically, AB 2499 expands leave and accommodation protections to victims of violence, including up to 12 weeks of leave for qualifying acts that include domestic violence, sexual assault, stalking, violent threats, acts involving the use or presence of a dangerous weapon, and/or any violence causing injury.  AB 2499 also requires employers to offer reasonable accommodations to employees who are victims of violence or the family member of a victim of violence.   

The Notice sets forth a summary of these expanded protections and can be found here.  It must be provided to (1) all California employees at the time of hire; (2) all California employees annually; (3) upon request; and/or to (4) any California worker who informs the employer that they are a victim of violence or the family member of a victim of violence.  As of July 1, 2025, California employers are expected to immediately comply with the notice requirements of AB 2499.  

Legal Updates:  New York 

New York State and New York City Both Now Require Paid Prenatal Leave for Employees

In our last newsletter, we reported that New York State as of January 1, 2025, requires employers of any size to provide paid prenatal leave to its employees working in the State of New York.  Not to be outdone, New York City passed its own requirement for paid prenatal leave, which went into effect on July 2, 2025, and is applicable to employers of any size for employees working in NYC.  Both laws require 20 hours of paid prenatal leave, separate from paid sick leave, and both prenatal leave laws require an automatic allotment of 20 hours of prenatal leave every 52 weeks, starting with the first day that the employee uses prenatal leave.  In that regard, prenatal leave does not accrue with hours worked like sick leave accrues.  If the employee is working in NYC, then the 20 hours of NYC prenatal leave will automatically offset the 20 hours required by the State (therefore, NYC employees do not get a compounded 40 hours), but not vice versa meaning that for example an employee working in Rochester will get 20 hours of State prenatal leave which doesn’t impact their NYC balance (which they aren’t eligible for unless they work in NYC).  If prenatal leave is exhausted within the 52 weeks, the employee can still use any New York sick leave, NYC sick leave, or any other leave she has available.  

Only female employees are eligible for the prenatal leave, which can only be used for their own prenatal medical care, including fertility treatment and termination of pregnancy medical care.  Prenatal leave cannot be used after the pregnancy ends.  

Employers cannot ask employees to disclose confidential information about their health condition as a requirement to request or use prenatal leave.  

Lastly, while the State prenatal law does not have a notice of rights distribution requirement nor an available balance paystub printing requirement, the NYC version of the law does.  The State’s FAQs about the State law are available here, while the City’s FAQs about its law are available here.

Legal Updates:  Multi-State

Alabama’s Temporary Tax Exemption of Overtime Premiums Expired on June 30, 2025

Wages for work in Alabama that counted as federal weekly overtime (hours worked over 40) paid between January 1, 2024 and June 30, 2025, were excluded from Alabama state gross wages and associated Alabama state taxes.  The exemption was not extended and ended on June 30, 2025, which means those wages are now Alabama taxable as they were prior to the temporary exemption. 

Florida Enacts CHOICE Act, Expanding Employer Rights Under Non-Compete Agreements

Effective July 3, 2025, Florida enacted the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act – a sweeping law that significantly expands employers’ ability to enforce non-compete and garden leave agreements. In contrast to recent federal and state efforts to curtail such restrictions on worker mobility, Florida has charted the opposite course championing restrictive covenants. The law authorizes "Covered Non-Compete Agreements," which permits employers to bar former employees from working in similar roles for up to four years. It also permits "Covered Garden Leave Agreements," under which employers may provide an employee up to four years’ advance notice of termination while continuing to pay the employee’s base salary and benefits—despite the employee not being required to work for most of the notice period and being prohibited from pursuing similar employment without employer consent. 

To be enforceable under Florida’s CHOICE Act, agreements must be in writing, governed by Florida law, delivered at least seven days before execution, advise of the employee’s right to consult with legal counsel before signing the agreement, and include written acknowledgment from the employee that the employee will receive confidential information or customer relationships during employment. Covered employees are those earning more than twice the mean annual wage in the applicable Florida county, excluding certain healthcare practitioners. Upon application by an employer, courts must issue preliminary injunctions prohibiting employees from providing restricted services, unless the employees can prove by clear and convincing evidence that they are not in violation of such agreements.  This makes it substantially easier to block employees from working for a competitor while litigation proceeds.

Maryland Delays Paid Family Leave Program to 2027

On May 6, 2025, Maryland delayed the launch of its Paid Family and Medical Leave Insurance (FAMLI) program.  Employers and employees will now begin contributing on January 1, 2027, with benefits available by January 3, 2028.  This is the third postponement since the program’s enactment in 2022. Contribution rates are expected to be announced by May 1, 2026.  Once implemented, the FAMLI program will provide up to 12 weeks of paid family and medical leave within a 12-month period, with the potential for an additional 12 weeks of paid parental leave. Weekly benefit payments will range from $50 to $1,000, with annual inflation-based adjustments starting in 2029.

Sick and Paid Leave Laws Update 

In our last newsletter, we reported on updates to sick leave requirements in the states of Connecticut, Missouri, and Alaska.  Sick leave requirements continue to change every few months:

Missouri’s new law repealed effective August 28, 2025:  Missouri’s sick leave law was passed by voters and became effective recently on May 1, 2025.  But, pressured by the State’s business community that the sick leave mandate (along with a minimum wage enhancement tied to inflation) is a job killer, Missouri’s governor signed a bill repealing the sick leave mandate, which will be effective on August 28, 2025.  Until further guidance becomes available from the State (FAQs here), the repeal puts employers and employees in limbo as to what happens to the sick leave accrued during the interim period.

Maine’s amendments effective September 24, 2025:  Maine’s paid leave law is unique in that it is not restricted to certain types of uses (e.g., illness or safety), but is instead like PTO, which can be used for any purpose.  But unlike PTO, Maine’s unused paid leave does not need to be paid out upon end of employment.  This law has been in effect since January 1, 2021, but a recent amendment increases the amount of paid leave that employees can accrue starting in their second year of employment.  The law already allows up to 40 hours of paid leave to be accrued and used in a year, but the amendment will allow up to 40 hours of paid leave earned in the immediately preceding year to be carried over into the current year without impacting the 40 hours that the employee can accrue in the current year.  For example, if the employee had 40 unused hours last year, he/she can carry that over into the new year and accrue another 40 hours in the current year for a total of 80 hours, but usage appears to still be limited to 40 hours per year.   The State’s FAQs are not updated yet (here) as of the time of this article, so employers should check to see if new guidance will change the amount of usage that employees are allowed per year once the accrual cap increases from 40 to 80.  There remains a 120-day waiting period before employees can use accrued paid leave hours and a poster requirement.  An updated poster was not available the time this article was prepared.  

Nebraska’s new law effective October 1, 2025:  Nebraska’s new sick leave law applies to employers with 11 or more employees.  Employers with 11 to 19 employees must provide up to 40 hours of sick leave each year, while employers with 20 or more employees must provide up to 56 hours each year.  Sick leave is accrued at the rate of 1 hour per every 30 hours worked while working in Nebraska.  Unused sick leave hours can be carried over from year to year, but in each year, the employee can only accrue and use up to 40 or 56 hours, as applicable.  Employees do not start accruing until they have worked 80 hours for the employer in Nebraska, but once accrual starts, the employee can use the sick leave hours as they accrue.  

Unused sick leave is not paid out upon end of employment. 

Employers also must provide a written notice of rights about the new law to current employees by September 15, 2025 or upon hire, whichever is later, and display a poster at the employer’s worksites in the State thereafter.  Employees must receive a statement with each regular pay period, or as an attachment to, the employee’s regular paycheck that informs of the amount of sick leave available, the amount of sick leave taken, and the amount of pay the employee has received as paid sick leave.  The State’s notice of rights is available here.  The State’s FAQs are available here.

Pittsburgh’s amendments effective January 1, 2026:  Pittsburgh’s original sick leave law became effective in March 2020, after lengthy legal challenges.  The city council recently passed amendments that will take effect on January 1, 2026.  The amendment increases the accrual rate from 1 sick leave hour per 35 hours worked to 1 sick leave hour per 30 hours worked in Pittsburgh.  Under current law, employers with 15 or more employees must allow employees to accrue and use up to 40 sick leave hours per year, and employers with 14 or less employees must allow employees to accrue and use up to 24 sick leave hours per year.  But, effective January 1, 2026, those yearly accrual and usage maximums are increased to 72 hours and 48 hours, respectively.  Carryover remains the same, which is that unused sick hours can be carried over to each new year up to the accrual cap.  The amendments eliminated the criteria that the employee must have worked at least 35 hours inside the City’s boundaries before starting to accrue sick leave, but there still remains a 90-day waiting period before employees can use accrued hours.  Also unchanged is that unused sick leave does not need to be paid out upon the end of employment.  

A notice of rights must be posted at the workplace (available here), but a new poster with the amended changes is not available at the time of the drafting of this article.  

Guidance about the revised law is available on the city’s website here. 

Minimum Wage Updates

Click here to see the Minimum Wage Chart.

Labor Relations Updates

For CBA updates, please reach out to laborrelations2@ep.com.

EP Legal and Labor Relations Contacts

• Kirsten Richesson (Executive Vice President, Chief Legal Officer):  krichesson@ep.com
• Joseph Scudiero (Senior Vice President & Chief Labor Counsel):  jscudiero@ep.com
• Bob Pucher (Vice President, Labor Relations):  rpucher@ep.com
• Scott Bishop (Vice President, Employment Law):  sbishop@ep.com
• Ed Pak (Vice President, Lead Technology & Pvacy Counsel):  epak@ep.com
• Alan Wu (Director, Employment & Labor Relations Counsel):  awu@ep.com
• Pantea Lili Ahmadi (Director, Corporate & Employment Law Counsel):  pahmadi@ep.com
• Robyn Coltin (Director, Employment Law & Litigation Counsel):  rcoltin@ep.com
• Jade Nguyen (Senior Privacy Manager):  jnguyen@ep.com
• Melissa Antuono (Senior Labor Relations Specialist):  mantuono@ep.com