HARMON CURRAN NONPROFIT LAW BLOG

As the year comes to a close, DC employers should make sure they are complying with several new employment laws that went into effect in 2022 or that will become effective in 2023.

Limitations on Non-Compete and Outside Employment Policies

As of October 1, 2022, the DC law limiting non-competition agreements and employer policies on outside employment became applicable to DC employers, after significant changes were made from the original 2020 ban which never went into effect.  While the current law is less restrictive than the earlier version, as of October 1, 2022, employers with employees working in DC still must comply with a number of restrictions.  Pre-existing non-competition agreements with employees continue to be valid, but employers can only enter into new non-competition agreements with covered DC based employees who make at least $150,000 annually (or $250,000, if the employee is a medical specialist), and those agreements must meet certain specified criteria as to scope, geographic area, duration, and prior notice to the employee.  The salary threshold amount will be adjusted for inflation each year, beginning January 1, 2024.

In addition, personnel policies prohibiting outside employment or outside business activities for current employees making less than the salary threshold amount are only valid if an employer “reasonably believes” that the outside employment or business will:

• Result in the employee’s disclosure or use of confidential or proprietary information;
• Conflict with the employer’s, industry’s, or profession’s established rules regarding conflicts of interest; or
• Impair the employer’s ability to comply with District or federal laws or regulations, a contract, or a grant agreement.

The revised language should allow non-profit employers to continue to have policies that prohibit outside employment where needed to protect an organization’s tax exempt status and to avoid conflicts of interest, but broad policy prohibitions unrelated to those goals or merely to prohibit competing outside employment by employees who make less than the salary exemption threshold will need to be revised.    

Independent Contractors Now Covered by DC’s Anti-Discrimination Law

The DC Council also recently passed changes to the DC Human Rights Act. The Human Rights Enhancement Amendment Act expanded the definition of “employee” to include independent contractors and unpaid interns, bringing such workers under the law’s antidiscrimination protections.  In addition, the amendment codified a definition of harassment based on sex or other protected statuses that looks at the totality of circumstances and eliminates the requirement found in federal law that harassment be severe or pervasive to be actionable.  DC employers should be aware of their additional obligations when handling complaints of workplace discrimination and harassment.

DC Universal Paid Leave

Since July 1, 2020, DC based employees have been able to obtain paid public benefits, funded by their employers, for certain qualifying parental, family caregiving, and medical leave. Effective October 1, 2022, the DC Council expanded the availability of these public benefits to provide eligible employees with up to 12 weeks of qualifying leave in a one-year time period, plus a possible additional two weeks of prenatal leave.  While employees apply for these benefits directly with the DC government, employers should make sure to give employees the required notice annually or when employees experience a qualifying event and make sure any additional benefits they choose to provide are coordinated with the expanded publicly available benefits.

Greater Protections for Employees’ Cannabis Use

DC employees should soon have greater protection from employment actions based on their use of cannabis. Section one of the Cannabis Employment Protections Amendment Act of 2022 provides that employers may not refuse to hire, terminate, suspend, fail to promote, demote, or penalize an individual based upon:

            (1) the individual’s use of cannabis;

            (2) the individual’s status as a medical cannabis user; or

            (3) the presence of cannabis metabolites in the body (suggesting that the individual used cannabis in the past) without signs of current impairment.

Under the law, employers may still prohibit the use, consumption, possession, storage, delivery, transfer, display, transport, sale, purchase, or growing of cannabis at the workplace, while performing work, or during work hours. Additionally, employers can take employment actions when an employee shows “specific articulable symptoms” of impairment during work that “substantially” impair the employee’s job performance or interfere with the employer’s obligation to provide a safe and healthy workplace as required by District or federal law. Employers can conduct drug tests after accidents or upon reasonable suspicion. There also are exemptions from the requirements of the law for employees in certain safety positions or where the employer’s actions are required by federal law, regulation, contract, or funding agreement.

Employees may bring a private right of action for violations of the law, subject to the requirement in certain instances to first pursue remedies through the DC Office of Human Rights.

Section two of the law amends the DC Human Rights Law and requires employers to treat medical marijuana use the same as legal use of other prescribed medicines, unless doing so would require the employer to:

            1) Commit a violation of a federal statute, regulation, contract, or funding agreement;

            2) Permit marijuana use during performance of a safety sensitive position; or

            3) Permit smoking marijuana at a location the employer owns, uses, or controls.

While the law has an effective date of October 22, 2022, employers will not be obligated to comply with the law’s requirements until its fiscal effect is included in an approved budget or on July 13, 2023, whichever is later.

Parking Benefit

In compliance with the D.C. Transportation Benefits Equity Amendment Act of 2020, as of January 15, 2023, all employers with 20 or more employees who work primarily in DC are required to submit their first biannual report to the District Department of Transportation (“DDOT”) regarding parking benefits, even if they do not provide such benefits to their employees.  Under the law, DC employers with 20 or more employees who offer a “parking benefit” to employees have additional obligations.  A “parking benefit” is “personal motor vehicle parking, on or within 0.5 miles of the business premises and located in DC, offered to an employee, in addition to compensation, either directly by the employer or through an employer subsidy, for which the employee pays nothing or less than market value.”

Covered employers who offer a “parking benefit” must also offer their staff one of the following alternative benefits to encourage them to decline the parking benefit:

• Offer a “clean-air benefit” by:
  1. Providing transportation in a commuter highway vehicle for employees;
  2. Giving employees a transit pass (including passes for travel by bus, streetcar, Metro, Maryland Area Regional Commuter, Virginia Railway Express, or Amtrak); or
  3. Reimbursing employees for the purchase, maintenance, and storage of a bicycle.
• Pay a $100 fee per employee offered a parking benefit per month; or
• Develop a transportation demand management plan.

The clean-air benefit must be equal in value to the parking benefit. Each year, employees who chose the clean-air benefit must be allowed to estimate the amount of monthly benefit they will use. If the employee uses less than the full clean-air benefit, the employer must make up the difference by:

• Providing additional compensation to the employee;
• Increasing the employer’s contribution to the employee’s health coverage; or
• Offering a combination of the options above.

The provisions on providing alternatives to the parking benefits do not apply to employers who owned their parking spaces before October 1, 2020 and continue to own the spaces. Employers that are under a current parking lease which began before October 1, 2020, do not become subject to these provisions until their parking lease ends.

The District has provided guidance about the law here.  Covered employers can submit the required report to DDOT here.

If you have questions about any of these recent laws, please contact us.