2023 Law Changes Employers Need to Know: Retirement Plan Updates, Rights for Working Mothers, and More

The dawn of a new year often brings new laws employers must follow, and 2023 is no exception: both federal and state laws are at play this year with new provisions that likely impact a broad range of your labor and employment practices, policies, and procedures. Here are updates to federal and Maine and New Hampshire state laws and plans that employers need to know in 2023.

Federal Law Updates

New federal laws now provide rights and protections for working mothers, including accommodations to better support pregnant and postpartum employees, and extending rights to breastfeeding employees who previously weren’t covered.

Pregnant Workers Fairness Act (PWFA)
Effective June 27, 2023

This Act, which applies to employers with 15 or more employees, requires them to provide reasonable accommodations to employees with conditions arising from pregnancy or childbirth, supporting their ability to prevent health complications and continue working.

Background: This new law provides broader protections to pregnant and postpartum employees than those currently required by the Americans with Disabilities Act (ADA) or the Pregnancy Discrimination Act (PDA).

Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act
Effective immediately

This Act applies to employers with 50 or more employees and largely addresses gaps in the 2010 Break Time Law to now cover exempt employees and others previously excluded from the law, including teachers and nurses.

Background: The 2010 Break Time Law required employers to provide non-exempt breastfeeding employees with reasonable break time and a private, non-bathroom space to pump. The PUMP Act expands existing protections for breastfeeding employees under the Fair Labor Standards Act (FLSA) to cover exempt employees and other categories of employees who were previously excluded from the law. PUMP also makes available existing remedies under the FLSA to breastfeeding employees.

Next steps for employers:

Review your policies and procedures to ensure they comply with the new pregnant, postpartum, and nursing mother protections. For support navigating these updates and understanding how they may impact your business, contact Labor & Employment attorney Ann Freeman at afreeman@bernsteinshur.com. 

Additionally, the much anticipated SECURE 2.0 Act was passed by Congress as part of the Consolidated Appropriations Act, 2021, and was signed into law on December 29, 2022, marking major changes to retirement savings plans.

SECURE 2.0 Act
Various effective dates

This Act includes provisions to expand and increase retirement savings, preserve retirement income, and simplify and clarify retirement plan rules.

Background: Building upon the Setting Every Community Up for Retirement Enhancement Act of 2019, the SECURE 2.0 Act outlines new provisions, including:

• • Increasing the age for Required Minimum Distributions.
  • Requiring automatic enrollment in new 401(k) and 403(b) plans.
  • Permitting hardship withdrawals from IRAs and retirement plans without early withdrawal penalties for expenses related to a federally declared disaster or as a survivor of domestic abuse.
  • Permitting employers to treat student loan payments as elective deferrals for matching contributions to certain plans.
  • Rollover of 529 college savings accounts to Roth IRAs in certain circumstances.

Additional SECURE 2.0 provisions target increasing savings by lower-income workers and making retirement plans more accessible for small businesses.

Next steps for employers: 

Plan participants, sponsors, and administrators should be aware of SECURE 2.0’s provisions impacting the types of plans they sponsor or are considering sponsoring.  For more information about specific SECURE 2.0 provisions that may impact you or your business, please contact Employee Benefits attorney Molly Gilligan at mgilligan@bernsteinshur.com or Tax attorney Bryce Morrison at bmorrison@bernsteinshur.com.

Maine State Law Updates

In Maine, two significant laws have passed and are effective as of January 1, 2023.

New State Minimum Wage Law

The minimum wage in Maine jumped sharply in 2023 from $12.75 to $13.80 per hour for non-exempt employees, and the minimum salary amount for exempt employees of $767.17 per week, or $41,401 per year. The maximum tip credit for this year also increased to $6.90.

Background: Since Maine enacted its minimum wage in 1959, it has incrementally increased by express amounts through 2021.  Effective in 2021, minimum wage adjustment is subject to the cost-of-living index (CPI-W) for the Northeast. This also impacts the minimum salary threshold for exempt employees because Maine law sets the minimum salary for exempt employees at 3000 times the state minimum wage. In addition to the salary, qualification for the exemption is dependent on the specific duties of each employee.

New State Vacation Pay Out Law

Maine private sector employers with 10 or more employees are now required by law to pay out accrued and unused vacation time to employees upon cessation of employment.

Background: This law does not apply to employers with fewer than 10 employees or public employers.  For private employees who are covered by collective bargaining agreements that include provisions for paying out vacation time upon cessation of employment, the collective bargaining agreement will govern.  There are many nuances related to this law, including its relationship with Maine’s Earned Paid Leave law and front-loaded vacation policies.

Next steps for employers: 

Review minimum wages and exempt employees’ salaries for compliance with Maine’s new minimum wage and review salaried exempt employees’ job descriptions to ensure they are classified appropriately. Also, check your policies for pay out of accruals upon cessation of employment. For support navigating these updates and understanding how they may impact your business, contact Labor & Employment attorney Ann Freeman at afreeman@bernsteinshur.com.

New Hampshire State Law Update

In New Hampshire, employers and employees have the option of enrolling in the nation’s first voluntary Paid Family and Medical Leave Plan through MetLife.

New Hampshire Paid Family and Medical Leave (NH PFML) Plan

This plan, available for all employers, offers up to 60% of an eligible employee’s average weekly wage for up to 6 weeks per year for specified leaves of absence from work, including a serious health condition, caring for family members with a serious health condition, and bonding.

Background: New Hampshire enacted the NH PFML Plan on July 1, 2021, and employer open enrollment began in December of 2022. For employees whose employer does not offer the NH PFML Plan, they can enroll individually until March 2, 2023. Benefits under plans that are purchased became payable on January 1, 2023.

Next steps for employers:

Employers who have not yet investigated whether to voluntarily enroll in the NH PFML Plan should take time to consider the benefits to employee health and retention and the organization’s bottom line. For more information about the plan, contact Labor & Employment attorney Talesha Saint-Marc at tsaintmarc@bernsteinshur.com.