Nonprofit organizations face a rapidly evolving employment landscape shaped by economic pressures, technological advancements and shifting workforce expectations. As we begin the new year, it is of the utmost importance that all employers (including non-profit employers) ensure they are complying with recent changes in employment laws. It is a great time to review and update your employee handbooks or manuals and plan for required and recommended trainings.
This article provides several key reminders about changes in employment laws nonprofit organizations in 2025.
Expanded Paid Sick or Other Leave Laws
Employers need to be mindful that many state and local sick leave and other leave laws are undergoing relevant and important changes in 2025. Many states and municipalities expanded the amount of leave and scope of paid leave required to be provided to employees.
For example, as of Jan. 1, 2025, all private-sector employers in New York State (including, but not limited, to non-profit employers) must now provide eligible employees 20 hours of paid prenatal leave per year. This is a new type of paid leave and is separate from, and in addition to, New York’s paid sick leave and other paid time off requirements.
Effective Jan. 1, 2025, Connecticut also expanded its paid sick leave coverage in many ways. Connecticut now requires all private-sector employers with 25 or more employees to provide employees 40 hours of paid sick leave annually. In future years, the employee threshold will drop so that more employers will be required to comply with this law. Additionally, the new law expands the reasons employees can use paid sick leave by modifying the definition of “family member” from only a spouse or minor child to now include a spouse, sibling, child, parent, grandparent, grandchild, or any “individual related to the employee by blood or affinity whose close association the employee shows to be equivalent to those family relationships.” The new law also prohibits employers from requiring documentation to support their request or use of paid sick leave for a qualifying reason and requires employers to provide written notice to employees of their paid sick leave rights.
Other states have also passed paid sick leave measures that take effect at some point in 2025, including Alaska, Missouri and Nebraska (many take effect later this year). In addition, California, Massachusetts, Michigan, Minnesota and Washington have expanded the scope of their paid sick leave laws in various ways, including to permit employees to use paid sick leave for reasons other than the employee’s own illness.
Nonprofit organizations with employees in any of these states — and in particular organizations with employees in multiple states with sick leave laws — should review their sick leave or paid time off policies to ensure compliance. Nonprofit organizations should also be aware that many cities and counties have enacted paid sick and safe leave ordinances that may be changing in the coming year as well.
Increases to Minimum Wage and Exempt Salary Thresholds
The minimum wage and the threshold salary necessary to classify employees as exempt from minimum wage and overtime requirements continues to inch up in many states and some municipalities. Nonprofit organizations should check their state’s department of labor website for specifics.
For example, as of Jan. 1, 2025, the minimum wage in Connecticut increased to $16.35 per hour. Further, employers in New York City, Long Island and Westchester County must pay employees at least $16.50 per hour as of Jan. 1, 2025, up from $16.00 per hour. For all other employees in the State of New York, the minimum wage increased to $15.50 per hour, up from $15.00 per hour. New York also increased the minimum salary threshold for employees to be classified as exempt.
The U.S. Department of Labor had issued regulations increasing the salary thresholds for various overtime exemptions nationwide, but a federal court in Texas on Nov. 15, 2024, vacated and set aside the new regulations on a nationwide basis. The final rule raised the white-collar exemption minimum salary threshold in two steps – first to $844 per week ($43,888 annually) effective on July 1, 2024, and then to $1,128 per week ($58,656 annually) on Jan. 1, 2025. This would have been a 64.9% increase over the 2019 threshold, and it would have automatically updated the salary threshold every three years. The rule also increased the “highly compensated employee” (HCE) threshold from $107,432 a year to $132,964 a year as of July 1, 2024, and again to $151,164 as of Jan. 1, 2025. There also would be automatic updates every three years.
As a result of the Texas federal court’s decision, the Jan. 1, 2025, increase did not go into effect as scheduled and the July 1, 2024, increase was nullified (at least temporarily). Employers that previously adjusted the salaries or exemption status of employees who earned less than the salary threshold set by the rule may decide to re-evaluate that decision (being mindful of contractual obligations and employee morale issues). However, not-for-profit organizations should keep in mind that some states have salary thresholds that exceed the FLSA threshold, including Alaska, California, Colorado, Maine, New York and Washington.
Pregnant Workers Fairness Act (PWFA) and Disability Accommodation Compliance
Nonprofit organizations should also be mindful about the anticipated increase in requests for accommodation under both the PWFA and disability discrimination laws. Recently, there has been a rise in cases related to disability accommodations reflecting employees’ heightened awareness and enforcement of workplace rights. Employers are facing increased scrutiny regarding their compliance with providing reasonable accommodations for employees with disabilities. This is expected to continue with the enactment of the Pregnant Workers Fairness Act (PWFA).
On June 18, 2024, the final regulations and interpretative guidance from the Equal Employment Opportunity Commission on PWFA went into effect. The PWFA requires the federal government, as well as private, state and local employers with 15 or more employees (including non-profit agencies), to “make reasonable accommodations to the known limitations related to the pregnancy, childbirth or related medical conditions of a qualified employee, unless [doing so] would impose an undue hardship on the operation of the business.” The EEOC’s regulations took an expansive view of these terms, so any request for PWFA accommodation should be carefully evaluated, preferably with counsel. In addition, federal and most state laws also require employers to provide accommodation to individuals with disabilities.
To prepare managers to handle such accommodation requests, employers should consider training managers on the PWFA and anti-disability discrimination laws (and plan for anti-harassment training, which is mandated in certain jurisdictions).
Employers should ensure that their policies and practices reflect best practices and contain information about how to request accommodation under the disability discrimination laws and the PWFA.
For more information, please contact Bryn Goodman at bgoodman@foxrothschild.com or Nicole Price at nprice@foxrothschild.com, or visit us at www.foxrothschild.com.
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