There were major forces at work this past year that have made the labor and employment landscape in 2015 more dynamic and unpredictable than in recent years. A volatile political climate, still-sluggish economy, historic swing in the mid-term elections and aggressive federal initiatives have left many employers wondering what 2015 holds in store. In this report, we cover some of the hottest employment and health care trends, plus new payroll, tax and benefits information.

1. 2015
HUMAN
RESOURCES
UPDATES
• Paid Sick Leave
• Legalization of Marijuana
• EEOC Pregnancy Guidance
• Social Media and Hiring Decisions
• New 2015 California Employment Laws
• California Workers’ Compensation Rates
Highest in the Nation
• IRS Increases Maximum Employee
Contribution to Health Care FSAs
• State Minimum Wages
• 2015 Training and Development
Webinar Schedule
INSIDE:

2. WHAT’S NEW IN LABOR AND
EMPLOYMENT LAW IN 2015?
Thereweremajorforcesatworkthispastyearthathavemadethelaborandemployment
landscape in 2015 more dynamic and unpredictable than in recent years. A volatile
political climate, still-sluggish economy, historic swing in the mid-term elections and
aggressive federal initiatives have left many employers wondering what 2015 holds in
store. In this report, we cover some of the hottest employment and health care trends,
plus new payroll, tax and benefits information.
STATE MINIMUM WAGES
ALASKA
$7.75 | $8.75 eff. 1-1-15
NEBRASKA
$7.25 | $8.00 eff. 1-1-15
MINNESOTA
$8.00/$6.50 | $9.00 eff. 8-1-15
Small Employers: $7.25 eff. 8-1-15
VERMONT
$8.73 | $9.15 eff. 1-1-15
SOUTH DAKOTA
$7.25| $8.50 eff. 1-1-15
ARKANSAS
$6.25 | $7.50 eff. 1-1-15
HAWAII
$7.25 | $7.75 eff. 1-1-15
CONNECTICUT
$8.70 | $9.15 eff. 1-1-15
RHODE ISLAND
$8.00 | $9.00 eff. 1-1-15
NEW YORK
$8.00| $8.75 eff. 12-31-14
MARYLAND
$7.25 | $8.00 eff. 1-1-15
Small Employers: $8.25 eff. 7-1-15
WEST VIRGINIA
$7.25 | $8.00 eff. 12-31-14
DELAWARE
$7.75 | $8.25 eff. 6-1-15
MASSACHUSETTS
$8.00 | $9.00 eff. 1-1-15
Small Employers: $7.25 eff. 8-1-15
STATE
Current Minimum Wage| New Minimum Wage
STATES WITH NEW MINIMUM WAGES
Currently, 24 states maintain
minimum wages above the federal
minimum wage of $7.25.
Effective January 1, 2015, 14 states
raised their minimum wage.
18 states match the federal
minimum wage. 3 states have rates lower than the
federal minimum wage.
5 states have not established a
minimum wage.
14 24
18
5
3

3. LEGAL MARIJUANA:
A New Challenge for Employers?
Voters in two states, Oregon and Alaska, as well as the
District of Columbia, approved the use of recreational
marijuana. They join Colorado and Washington which
passed similar laws in 2014 and 2012, respectively. This is
in addition to 24 states that have legalized marijuana use
for certain medical purposes.
Each state permits adults 21 and older to possess varying
amounts of cannabis (ranging from one to eight ounces)
and to grow up to six marijuana plants. Oregon and Alaska
permit the production and sale of marijuana, which will be
taxed, while Washington DC does not.
Business owners in states that permit recreational or
medical marijuana use may rightfully be concerned about
the impact it can have on their operations. While state
law may permit individuals to use marijuana for certain
purposes, employers should recognize they still have the
right to maintain a drug-free workplace. They should
create a workplace policy which unequivocally states that
it is forbidden for an employee to possess, use or be under
the influence of marijuana in the workplace. In addition,
employers are most likely not required to accept marijuana
use as a reasonable accommodation.
While the growing use of marijuana may concern some
business owners, well-written and enforced policies
should limit the impact of this new trend on employee
performance and overall operations.
PAID SICK LEAVE:
A Growing Trend on the State & Local Level
A new employment trend seems to be emerging
across the country: mandatory paid sick leave.
California and Massachusetts became the second
and third states, respectively, to guarantee paid
sick leave to most employees in their state. The
first state was Connecticut which enacted the law
in July, 2011.
The California law provides that most employees
who work for at least 30 days are entitled to paid
sick leave, accruing at a rate of at least one hour
for every 30 hours worked. An employer can cap an
employee’s use of paid sick days to 3 days (24 work
hours) per year.
The Massachusetts law requires employers with
11 or more employees to provide up to 40 hours
of paid sick time to each employee per year.
Employers with 10 or fewer employees are not
required to offer paid sick leave under the law.
Both the California and Massachusetts paid sick
leave laws will take effect on July 1, 2015.
Severalmunicipalitiesalsoenactedtheirownpaidsick
leave policies. Oakland joins fellow-California cities
San Francisco and San Diego. Trenton and Montclair,
New Jersey join a host of New Jersey cities with paid
sick leave policies already in place: East Orange,
Irvington, Jersey City, Newark, Passaic, and Paterson.
Seattle, Washington, New York and Washington D.C.
also have paid sick leave laws in effect.
It is important that employers are aware of the
trend, and should review or modify existing paid
sick leave policies to ensure compliance with all
applicable state and local laws.

4. SOCIAL MEDIA AND
HIRING DECISIONS:
A DANGEROUS MIX
In today’s society, social media is ubiquitous. Easy access to
personal information online makes it extremely challenging
for hiring managers and human resources staff to remain
objective when making hiring decisions. However, that is
precisely what the Federal Trade Commission expects. In
a public workshop entitled, “Big Data: A Tool for Inclusion
or Exclusion?” a panel addressed the implications of using
social media to screen potential employees.
The FTC warned employers that even a casual review
of a job applicant’s online profile exposes them to an
abundance of information otherwise considered to have a
protected status. This includes race, gender, religion, sexual
orientation, and disabilities. Using social media as part of
the screening process puts employers in a very vulnerable
position, it cautioned, and the EEOC has in fact been active
in recent months scrutinizing employers’ use of social media
in their hiring practices.
Employers should carefully evaluate if and how they will
use online information about a potential hire. They should
implement a training program for employees involved in
the hiring new staff and should consider keeping records of
how they use social media as part of their hiring processes.
The Equal Employment Opportunity Commission
(EEOC) recently issued new enforcement guidance
relating to pregnancy and breast-feeding women in the
workplace. While EEOC guidelines are not considered
law, in this case, the very issuing of the guidance is
considered controversial. It states that even though an
employee is healthy and their pregnancy is normal, and
that they are in no way disabled under the Americans
with Disabilities Act (ADA), employers must still modify
job requirements for pregnant or lactating employees
as if they were covered under the ADA.
The timing of the EEOC guidance also raises questions,
as the U.S. Supreme Court is set to rule on this very
issue in the coming months. In the highly publicized
case of Young v. United Parcel Service, Inc. the Fourth
Circuit Court of Appeals held that the Pregnancy
Discrimination Act (PDA) does not require the types
of accommodations that the EEOC is now requesting.
Given the Supreme Court’s decision to hear Young v.
UPS, many industry experts believe the EEOC’s guidance
is premature and could actually be overturned by the
high court in the near future. We will continue to watch
this story closely, and report to you as it develops.
EEOC ISSUES
PREGNANCY
I NEED THE
BABY AND
MOTHER IMAGE
DISCRIMINATION
ENFORCEMENT GUIDANCE

5. California’s 2014-2015 legislative session ended on August 31, 2014, with Governor Jerry Brown signing a number of
important bills into law. Below is a brief summary of the most important legislation, relevant to the majority of California
employers.
AB 1522 - Paid Sick Leave
Employees who work for at least 30 days are entitled to paid sick leave, accruing
at a rate of at least one hour for every 30 hours worked. An employer can cap an
employee’s use of paid sick days to 3 days (24 work hours) per year. An employee is
permitted to use their accrued sick days beginning on the 90th day of employment.
AB 2053 - “Prevention of Abusive Conduct” training
Employers that currently provide mandatory sexual harassment training must add
‘preventionofabusiveconduct’tothetrainingcurriculumformanagersandsupervisors.
Abusive conduct is defined as conduct with malice that a reasonable person would
find hostile, offensive and unrelated to the employer’s legitimate business interests.
AB 1897 – Labor Contractor Requirements
Business entities with 25 or more workers that contract with staffing
agencies or outside labor providers are now accountable for wage-and-
hour violations. If the labor contractor fails to pay its employees
properly or to provide workers’ compensation coverage, the law
imposes legal responsibility on the client employer.
AB 1443 - Anti-harassment and discrimination
protections against unpaid intern
Prohibits discriminating against unpaid interns
and volunteers on the basis of any legally
protected classification (such as race,
religion, sexual orientation, disability,
etc.) and to prohibit sexual harassment
of them.
AB 1660 - FEHA Prohibits
Discrimination based on Driver’s
License for Undocumented Workers
Last year, California passed AB 60
which authorized the Department of
Motor Vehicles to issue a special driver’s license
to an undocumented person. This law makes it illegal
to discriminate against an individual because they hold
such a license, indicating the worker is undocumented. It
further prohibits an employer to require an applicant or
employee to present a driver’s license unless having one is
a requirement of the job.
AB 1847 - Updating Mental Health
Disorders Language
The law changes terms used to describe mental
health conditions (such as “insane,” “mentally
defective,” and “abnormal”) to “persons with a
mental health disorder” or “persons who lack
legal capacity to make decisions.”
NEW 2015 CALIFORNIA EMPLOYMENT LAWS
IRS Increases Maximum Employee Contribution to Health Care FSAs
The Internal Revenue Service is raising the maximum annual employee contribution to a health care flexible spending
account plan $2,550 in 2015. This is up $50 from the previous $2,500 limit which has been in effect since 2013.
Employers that sponsor health care FSAs should update their employee communication materials and employer’s
Section 125 Cafeteria Plan document accordingly. In the event that open enrollment has already begun, the employer
may need to communicate directly with employees who have already made their elections.

6. AFFORDABLE CARE ACT:
What Lies in Store for 2015
Following the Republican victories in the mid-term elections, the GOP is redoubling its efforts
to investigate, de-fund, and repeal as much of the Affordable Care Act as possible. They have
hired a team of lawyers and are pushing for Supreme Court review of key sections of the law.
While their success remains to be seen, one thing is certain: Obamacare will remain at the
top of the headlines throughout 2015. Below are a few key issues in the coming year:
• The Supreme Court has agreed to review the challenge that premium subsidies for
individuals should be disallowed in the 36 states that did not establish their own
Exchanges and are using the Federal Exchange (Marketplace). Should the Supreme
Court find in favor of the plaintiffs, individuals in these states would lose their subsidies,
which covers a significant portion of the premium costs. The decision would in effect
kill Obamacare, without actually overturning it.
• In November, 2014 the IRS issued a ruling that employer-sponsored health plans
must cover in-patient hospitalization services. If they do not, they are not ACA
compliant. Many employers had adopted low-cost, minimum-value plans to meet
their requirement of offering affordable coverage under the law. The IRS is permitting
employers to keep these plans for one year if they already began implementing the
plan by November 4, 2014.
• Penalties for not obtaining health insurance coverage increase sharply in 2015. In 2014,
the “shared responsibility payment” for not having coverage was either 1% of annual
household income or $95 per adult (the higher of the two). The maximum penalty for a
family using the latter method was $285. In 2015, these penalties jump to 2% of annual
income or $325 per adult, with the maximum family penalty increasing to $975.
Next year could bring significant changes to the Affordable Care Act. Whether or not your
business is directly affected, the ramifications of these developments will be far reaching for
businesses and individuals, so watch for changes and updates to the law.
TAX UPDATES FOR 2015
FEDERAL
FICA (Social Security)
Maximum Taxable Earnings $118,500
Employer/Employee 2015
Withholding Percent 6.2%
Employer/Employee 2015 Maximum
Withholding $7,347.00
(up $93.00 from 2014 for ER and EE)
FICA (Medicare)
Maximum Taxable Earnings No Limit
Employer/Employee 2014 Withholding Percentage
1.45%
Employer/Employee 2014 Maximum Withholding
No Limit
(No change from 2014)
Additional Medicare Tax for Wages in Excess of
$200,000 Rate 0.9%
(No limit, no change from 2014)
SUPPLEMENTAL WAGES
Rate (flat rate withholding method) 25%
Over $1 million 35%
(No change from 2014)
WITHHOLDING
The 2015 withholding tables have not been finalized,
as Congress has not yet made their final decision on
whether to adjust the tax rates. Any changes in the
withholding tables will be communicated once they
have been announced.
401(k) PLAN LIMITS:
Elective Deferrals $18,000
(Up from $17,500 in 2014)

7. CALIFORNIA WORKERS’ COMPENSATION RATES
HIGHEST IN THE NATION
California has once again reaffirmed its position as one of the least business-friendly states in the nation after being ranked
as the most expensive state for workers’ compensation costs.
The 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary reports that, on average, California businesses spend
$3.48 for every $100 of payroll to pay for workers’ compensation. That is almost double the average national rate of $1.85.
RISING RATES, DESPITE REFORMS
Over the past 5 years, California’s average rates have risen approximately 40%. In 2012,
the California legislature passed Senate Bill 863 which was touted as ushering in a new
era of reduced claims litigation and improved efficiency. The projected savings from
these new reforms were earmarked for increasing the benefits to injured workers.
Unfortunately, despite the reforms, rates continued to rise as California moved up from
3rd most expensive state in 2012, to the most expensive 2 years later.
According to Jerry Azevedo, a spokesman for the California-based Workers’
Compensation Action Network, this increase can be blamed on a variety of factors,
including:
An increasing rate of work-related injury claims
Increased workers’ compensation litigation
Increasing medical costs
Higher unemployment rates, which is often linked to an increase in claim frequency
Azevedo claims much of the collected premiums pay for attorneys who dispute medical treatments, while other money gets
wasted in administrative overhead and brokers’ commissions.
401(k) Catch Up Contribution Deferrals $6,000
(Up from $5,500 in 2014)
Maximum 401(k) contribution
(employer and employee) $52,000
(No change from 2014)
Maximum employee compensation towards
contributions $260,000
(No change from 2014)
HSA PLAN DEFERRAL LIMITATIONS
Individual Maximum Contribution (Includes
Employer Contribution) $3,350 (up $50 from 2014)
Family Maximum Contribution
(Includes Employer contribution) $6,650
(up $100 from 2014)
Catch-up Contributions (55+ years old) $1,000
(No change from 2014)
CALIFORNIA ONLY:
SUPPLEMENTAL WAGE WITHOLDINGS
Bonuses & Earnings from Stock Options 10.23%
(No change from 2013)
Other Supplemental Earnings 6.60%
(No change from 2013)
DISABILITY INSURANCE (Employee Paid)
Maximum 2014 Wages Subject to Withholding $101,636
(up $756 from 2013)
Employee 2014 Withholding Percentage 1.0%
(No change from 2013)
Employee 2014 Maximum Deduction $1016.36
(up $7.56 from 2013)

8. About CPEhr:
Founded in Los Angeles over 30 years ago, CPEhr is one of California’s oldest and most experienced Human Resources Outsourcing and Professional Employer
Outsourcing(“PEO”)firms.Itservicesover75,000employeesnationwide,inawiderangeofindustriesandworkforces,rangingfromtwotothousandsofemployees.
With a retention rate that exceeds 90%, its team members are committed to our clients’ success.
Unrivaled industry experience, combined with the flexibility afforded to a privately held corporation, allows CPEhr to deliver highly customized human resources
support, while at the same time offering benefits typically associated with Fortune 500 companies.
FOR MORE INFORMATION ABOUT HR OUTSOURCING:
For more information regarding Human Resources Outsourcing and
how it may fit with your organization’s needs, contact CPEhr for a
complimentary Business Consultation. In this no-obligation meeting, a
senior consultant will analyze your current human resources practices
and offer a customized solution to meet your needs.
Email: info@cpehr.com
Phone: 877-842-4987
Website: www.cpehr.com
Twitter: @cpehr
Facebook: www.facebook.com/cpehr
AREAS OF SERVICE INCLUDE:
• Human Resources Administration
• ACA/Health Care Reform Compliance
• Employment Compliance
• Employee Benefits
• Retirement Planning
• Management Training
• Safety and Risk Management
• Workers’ Compensation Insurance
• Payroll and Tax Administration
• Recruiting
With health care, employment law and insurance guidelines changing so rapidly, employers must take a proactive
stance to understand these changes and how they will impact their business. CPEhr is proud to offer a complimentary
webinar series covering a wide range of Human Resources, Safety, Insurance and Health Care topics, delivered by
experienced experts and trainers. We invite you to join our next webinar!
Details and registration can be found at www.cpehr. com/webinar-registration.
2015
TRAINING AND
DEVELOPMENT
WEBINAR SCHEDULE
With health care, employment law and insurance
guidelines changing so rapidly, employers must be
proactive so they understand how these changes will
impact their businesses. CPEhr is proud to offer a
complimentary webinar series covering a wide range
of Human Resources, Safety, Insurance and Health Care
topics, delivered by industry experts. We invite you to join
our next webinar!
Details and registration can be found at:
www.cpehr. com/webinar-registration.
2015
TRAINING
AND
DEVELOPMENT
WEBINAR
SCHEDULE
January 2015 Labor Law Updates
February Basics of Harassment Training
March Legal Investigations
April Understanding the Generations
May Exempt/ Non-Exempt or Independent Contractor?
June Effective Interviews—How to find the right candidate
July Workers’ Compensation Basics
August The Benefits of Human Resources Outsourcing
September Effective Performance Appraisals
October Legal Termination
November Managing Your Team Through Times of Change