Compliance

Tariffs impacting employment
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The Intersection Between Tariffs, Labor Policy, and Contract Workers
The Intersection Between Tariffs, Labor Policy, and Contract Workers 1280 690 PayReel Updates

Today’s workforce decisions are more than just business choices, they’re shaped by global politics, changing laws, and the growing use of contract labor. When tariffs raise costs, when labor laws shift, and when more work moves outside the bounds of traditional employment, companies are left figuring out how to stay compliant, stay efficient, and stay in business.

Blurred Lines

The lines between global trade, government policy, and workforce management are more connected than ever. Tariffs and other trade restrictions affect the bottom line, which pushes companies to rethink how they hire and pay people. At the same time, governments are tightening the rules around who can legally be called an independent contractor. Put those two forces together, plus the rising use of freelancers and project-based workers, and you’ve got a complicated environment to manage. To understand how all this plays out in practice, let’s start with one of the clearest pressure points: tariffs.

How Tariffs Affect Hiring and Pay

Tariffs are meant to protect certain industries, but they also drive up the cost of goods and materials. That hits businesses hard, especially those in manufacturing or with global supply chains. When budgets shrink, labor costs are often one of the first places companies look to cut back. They may freeze wages, slow hiring, or shift more responsibility to contract workers.
And that’s where things get even more complicated. Because the legal landscape is changing fast. The rules about who qualifies as a contractor versus an employee are evolving quickly and carry serious consequences.

Changing Labor Laws and Worker Classification

Worker classification used to be fairly straightforward. But with laws like California’s AB5 and updated guidance from federal agencies, the rules have become harder to navigate. Whether someone is legally an employee or an independent contractor depends on a mix of factors:

  • Who controls how and when the work is done?
  • Who pays for tools and expenses?
  • Is the work part of the company’s main business or just support?
  • How long does the working relationship last?

The total cost of labor includes more than just wages. It includes taxes, benefits, legal risk, turnover, and the time it takes to onboard and manage workers. When compliance is handled poorly, costs go up fast. That’s why smart companies are focusing on reducing risk and staying ahead of changes.

How Companies Are Adjusting

To keep up with shifting policies and workforce pressures, companies are taking a more strategic approach to labor management by:

  • Proactively reviewing worker classifications to avoid regulatory issues
  • Building flexible teams that blend full-time employees, contractors, and offshore talent
  • Using scenario planning to stay ahead of change

These strategies, along with resources like onboarding software, legal review services, and Employer of Record (EOR) partners, are helping teams manage the complexity by simplifying compliance, reducing risk, and freeing up internal staff to focus on growth.

Final Thoughts

Trade policies and labor laws are no longer separate from day-to-day business decisions –they’re actively shaping how companies hire, manage, and pay their people. Worker classification has become a legal minefield, and even small missteps can lead to costly consequences. Navigating this reality takes more than good intentions; it requires clear processes, reliable tools, and experienced partners who understand the stakes.

PayReel helps companies simplify compliance, manage risk, and stay nimble in a changing labor landscape. If you’re rethinking how you structure and support your workforce, now’s the time to talk.

🗓️ Schedule a Call

🎧Access the Live Recording → Politics of Pay: Where Tariffs, Labor Policy, and Contract Workers Collide

Real IDs for contract workforce
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From Confusion to Compliance: A REEL Guide for Managing Freelancer under REAL IDs
From Confusion to Compliance: A REEL Guide for Managing Freelancer under REAL IDs 720 457 PayReel Updates

As of May 7, 2025, U.S. travelers must show a REAL ID-compliant license (or passport) to board domestic flights or enter certain federal buildings. But according to Fox News, a significant portion of the population still doesn’t meet the new standard.

For companies managing a contract workforce, this isn’t just a travel issue, it’s a workflow risk that can lead to missed flights, delayed projects, and unhappy clients. And it’s not just about one worker—it’s about how easily a single oversight can ripple across your entire operation. When you’re juggling deadlines, client expectations, and cross-country logistics, one small misstep can turn into a big mess.

Here’s how to handle REAL ID enforcement without it becoming a last-minute scramble.

Why REAL ID Is Still Creating Problems

The deadline may have passed, but the challenges are just now showing up in the day-to-day:

Freelancers are showing up at the airport with outdated IDs.
Projects are delayed due to missed travel.
Last-minute worker replacements are disrupting schedules.

And because compliance varies by state, age group, and region, your team might not realize there’s a problem until it’s too late.If you’re not already checking for REAL ID compliance before assignments go live, you’re rolling the dice on smooth delivery.

At PayReel, we’ve guided companies through compliance changes like this before. From onboarding and paperwork to scheduling and worker readiness, we help ensure nothing gets in the way of the job getting done.

How to Stay Ahead of REAL ID Delays: A 5-Step Plan

Add REAL ID Checks to Onboarding
Don’t assume workers are compliant –ask. Update your intake forms to include REAL ID confirmation, and request a photo or scan of the ID in advance. We’ve built this into our platform, so it’s automated, secure, and easy to track.

  1. Reach Out to Existing Workers
    Send a quick message to your active contractors explaining what REAL ID is, why it matters, and how to upgrade. Include links to official DMV sites. Pro tip: a heads-up now can save you hours of rescheduling later.
  2. Train Your Ops and Scheduling Teams
    Your internal staff should know how to spot a REAL ID and when to raise a flag. It’s usually just a star in the top corner –but knowing that can mean the difference between an on-time flight and a missed job.
  3. Set Clear Policies
    Make it a rule: no flights or secure-site access without a REAL ID on file. We help clients track this in real time, so they’re never caught off guard.
  4. Offer Help for High-Value Workers
    If one of your key freelancers is still behind, it may be worth helping them navigate the process or even covering the cost. It’s a small step that keeps your projects on track.

REAL ID is just one of many changes that affect how you manage a flexible workforce. What sets PayReel apart is that we don’t just offer a platform; we partner with you to keep your operations smooth and compliant, even as the rules change.

Here’s what that looks like in practice:

  • We build REAL ID checks into your onboarding process
  • We flag missing documentation before it becomes a problem
  • We give you visibility into workforce readiness, so no one slips through the cracks

Let’s Make This One Less Thing to Worry About

You’ve got enough moving parts already. Worker ID compliance shouldn’t be the thing that causes a last-minute delay, a lost booking, or a frustrated client.

We’ll help you get your team ready –and stay ready– so your projects run smoothly from start to finish.

👉 Talk to us today about how we can help build a better system around compliance, onboarding, and freelancer management.

 

Woman working remotely in cafe on laptop
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The Freelancer Compliance Time Bomb: Why 2025 Is the Year You Can’t Afford to Get Classification Wrong
The Freelancer Compliance Time Bomb: Why 2025 Is the Year You Can’t Afford to Get Classification Wrong 2560 1203 PayReel Updates

If you’re hiring freelancers, creatives, contractors, or gig workers, here’s the hard truth:

2025 isn’t going to be kind to companies still flying loose when it comes to worker classification and onboarding. The “gray area” days are over — and the headlines prove it.

Uber, Lyft, and Billions in Back Pay

Let’s start with the biggest bombshell: California just announced that Uber and Lyft withheld billions in pay from their drivers by misclassifying them as independent contractors. That’s not a typo. Billions. This comes on the heels of years of legal battles, AB5 confusion, and corporate lobbying to skirt the issue.

Now, the state is digging in. And if the state of California — one of the biggest economies in the world — is going after the rideshare titans, you can bet smaller companies won’t be flying under the radar for much longer.

Misclassification Crackdowns Are Going Local

In Washington D.C., the city’s Attorney General is investigating GoPuff for similar misclassification allegations. Meanwhile, new legislation is popping up in state after state — like California’s renewed push to make its worker classification laws even tougher to sidestep.

The trend is clear: enforcement is getting more aggressive, not less.

And let’s be honest — most companies aren’t equipped to navigate this minefield solo. Especially not in fast-moving industries like media, tech, and creative services, where the workforce is flexible by design.

Scaling Without Guardrails? That’s a Lawsuit Waiting to Happen

The entertainment world is no exception. As Peyton Manning’s Omaha Productions expands with backing from Endeavor’s Patrick Whitesell, and Sundance announces its relocation to Boulder, the creative economy is experiencing a massive geographic and operational shift.

But with that growth comes risk. When you’re scaling productions, onboarding new talent quickly, and juggling multiple projects across states, compliance becomes a liability if it’s not actively managed.

And here’s the kicker: most internal teams aren’t built for this. HR and operations leaders are being asked to wear too many hats, and when compliance gets deprioritized, the company ends up footing the bill.

What You Don’t Know Can Cost You Everything

Misclassifying a worker isn’t just a technicality. It can mean:

  • Back pay and benefits for months (or years)
  • Penalties, fines, and tax liabilities
  • Class-action lawsuits
  • Damage to your brand and vendor reputation
  • Operational delays due to audits or legal action

And that’s before you factor in how time-consuming and messy reactive clean-up can be.

The EOR Advantage: Stop Hoping You’re Covered

Partnering with an Employer of Record (EOR) like PayReel means you don’t have to rely on guesswork or duct-taped internal processes. We help you:

  • Onboard contract workers quickly and compliantly — even across multiple jurisdictions
  • Stay ahead of classification laws — so you don’t end up in the next headline
  • Mitigate risk — and keep your internal teams focused on what they do best

If you’re growing fast or working with project-based talent, you don’t have time to get dragged into a legal quagmire. You need someone in your corner who knows how to navigate the rules and protect your business as those rules change.

Don’t Wait for a Lawsuit to Get Serious About Compliance

Join our next live session to learn how leading production and media companies are building scalable, compliant freelancer strategies.

Or get in touch to talk about how PayReel can tailor support to your business today.

Because in 2025, hoping for the best is the riskiest move you can make.

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A Rollercoaster of Regulations: The Ups, Downs, and Sudden Changes of Labor Law
A Rollercoaster of Regulations: The Ups, Downs, and Sudden Changes of Labor Law 1280 659 PayReel Updates

For staffing firms and employers, 2024 brought several major shifts that impacted how workers are classified, compensated, and managed. Let’s break down the most significant regulatory changes, how they evolved, how they were received, and where they stand today.

Salary Thresholds for “White Collar” Exemptions

Original Rule:

The Fair Labor Standards Act (FLSA) set the salary threshold for “white collar” exemptions—covering executive, administrative, and professional roles—at $35,568 per year ($684 per week).

How It Changed:

In 2024, the Department of Labor (DOL) announced two planned increases:

  • First increase: $43,888 per year, effective July 1, 2024.
  • Second increase: $58,656 per year, scheduled for January 1, 2025.

Reaction:

Employers worried about rising labor costs and operational challenges, while employee advocates welcomed the changes for promoting fair compensation.

Where did we land?

On November 15, 2024, a federal judge in Texas vacated the DOL’s rule, stating it exceeded the agency’s authority by prioritizing salary over job duties for exemption status. Consequently, the salary threshold reverted to the previous level of $35,568 per year.

Federal Contractor Minimum Wage Mandate

Original Rule:

In 2021, Executive Order 14026 set a $15/hour minimum wage for employees working on federal government contracts, with annual inflation-based increases.

How It Changed:

In September 2024, the DOL announced a new rate of $17.75/hour, effective January 1, 2025.

Reaction:

Supporters applauded the raise for ensuring fair pay, while opponents, including some states and contractors, criticized it for potentially raising project costs and reducing competition, claiming executive overreach under the Procurement Act.

Where did we land?

The rule is still active, but legal challenges have resulted in a circuit split:

  • The Ninth Circuit questioned its legality.
  • The Fifth Circuit upheld it.

The rule’s future remains uncertain as further court decisions and potential administrative changes loom.

Independent Contractor Classification

Original Rule:

A 2021 rule (from the Trump Administration) made it easier to classify workers as independent contractors by focusing on two main factors: control over work and opportunity for profit or loss.

How It Changed:

The 2024 rule replaced it with a six-factor “economic realities” test, making it harder to classify workers as contractors. The factors consider relationship permanence, control level, and whether the work is core to the business.

Reaction:

Workers expressed concerns about the potential loss of flexibility and fewer job opportunities. Businesses worried about higher costs and the complexities of maintaining compliance. On the other hand, worker advocacy groups praised the update, highlighting its role in protecting workers from misclassification.

Where It Stands Now:

The rule remains in effect, but legal challenges persist, with appeals pending. A change in administration could potentially reverse the rule.

Managing the Rollercoaster with an EOR

For staffing firms, keeping pace with frequent regulatory changes is like riding a rollercoaster without a harness—wild and risky. Wage mandates, classification shifts, and exemption updates can lead to compliance pitfalls, fines, and project delays.

Partnering with an Employer of Record (EOR) like PayReel can help staffing firms ride out the ups and downs.

An EOR manages compliance, keeping up with evolving regulations, ensuring accurate worker classification and timely, compliant payroll, and streamlines onboarding, letting firms focus on growth by providing tailored examples of how PayReel achieves secure, agile, and scalable workforce management solutions, instead of red tape.

In a world of regulatory twists and turns, PayReel keeps staffing firms on track.

An EoR helping staffing agencies improve productivity
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How Can Staffing Agencies Increase Productivity?
How Can Staffing Agencies Increase Productivity? 1280 572 PayReel Updates

A staffing agency’s main priority is to match the perfect candidate with the right company, whether for specialized skills, long-term commitments, or temporary positions. However, this provides a range of administrative burdens, from payroll contracts to legislation compliance, which can be time-consuming and detrimental to productivity.

What makes a staffing agency successful?

  • Effectively matching talent with the ideal role and company: A successful staffing agency excels at pairing candidates with roles that align with their skills, experience, and career goals, ensuring long-term satisfaction for both employees and employers.
  • Providing outstanding client service at every step: A top-performing staffing agency prioritizes clear communication, responsiveness, and personalized support to build lasting client relationships.
  • Remaining operationally and legislatively compliant: A successful agency stays current with labor laws, tax regulations, and worker classifications to avoid legal risks and penalties. By maintaining strict compliance, it protects its business and clients while ensuring smooth, disruption-free operations.

What challenges do staffing agencies face?

  • Internal HR admin: Managing administrative tasks such as payroll, contracts, background checks, and tax deposits in-house can divert time and energy that could be spent winning new clients.
  • Changing legislation: It can be difficult to keep up with legislation, especially during presidential transitions. Standards such as wage and hour laws can be revised under a new administration, making compliance even more complicated and costly for businesses.
  • Operational complexities: Accurate worker classification is critical to avoid legal penalties and maintain operational efficiency. Misclassification can lead to substantial fines and reputational damage.

Introducing Employer of Record Services

What is an Employer of Record?

An Employer of Record (EOR) is a third-party organization that manages the legal and regulatory responsibilities of employing workers for a business. The EOR handles all personnel functions for tax, insurance, and compliance purposes.

What does an EOR provide?

The role of an EOR can vary to meet a business’ requirements. Their responsibilities can include but are not limited to:

  • Payroll processing and funding
  • Tax deposits and filing
  • Contracts
  • Benefits
  • Payroll relating to employment termination
  • Background checks/drug screenings
  • Full insurance coverage
  • I-9 / E-Verify forms
  • Unemployment insurance
  • Data security

How can an Employer of Record help staffing agencies

An Employer of Record frees staffing firms from the overwhelm of copious administrative tasks, so they can focus their energy on what is important: client relationships.

How EORs help with easing resource

Enables Focus on Growth: EORs take on administrative burdens, allowing staffing agencies to focus on sourcing top talent, strengthening client relationships, and expanding business without distractions.

Streamlines Onboarding: EORs provide a smooth onboarding process that reduces delays, improves worker integration, and boosts employee retention. A positive onboarding experience is crucial for temporary workers, as it helps them feel welcomed and prepared. A negative experience can double the chance of temporary workers seeking opportunities elsewhere, so this can make a big difference.

Simplifies Scalability: As staffing agencies grow or expand into new markets, managing a larger, more diverse workforce can become increasingly complex. Partnering with an EOR makes it easier to scale operations, enter new markets, or specialize in niche industries by handling the complexities of compliance and administration.

How EORs help with Payroll compliance

Removes the Burden: Payroll compliance is complicated and high-stakes, as it must comply with federal, state, and local requirements. EORs keep up with the ever-shifting legal hiring landscape, so the staffing agency doesn’t have to.

Protects From Fines: An EOR ensures compliance with labor laws, tax regulations, and worker classifications, reducing the risk of misclassification and legal penalties. This gives staffing firms peace of mind and protects them from costly fines.

Guarantees Accurate Payments: One of the most important aspects of maintaining a strong relationship with workers is ensuring they are paid accurately and on time. EORs handle payroll processing with precision, ensuring that temporary workers receive their payments without errors or delays. Timely and accurate payments build trust with workers, helping staffing agencies retain clients and maintain a strong reputation within the industry.

Relax with PayReel

PayReel is the trusted EOR for staffing agencies, offering expert compliance management and seamless administrative support. With our in-house specialists handling the details, you can focus on what matters most – achieving success.

Ready to increase productivity? Chat with an expert today.

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11 States, 5 GIFs, and 15 Current Workplace Law Issues on the Ballot
11 States, 5 GIFs, and 15 Current Workplace Law Issues on the Ballot 150 150 PayReel

As states across the U.S. consider changes to everything from minimum wage changes to legalizing recreational cannabis use, employers could need to make significant adjustments to their business operations. These proposals could require businesses to adapt to budget changes, adjust their worker classification procedures, make updates to their compliance policies, and more.

Top 15 Current Workplace Law Issues

Alaska, California, Missouri, and Nebraska: Minimum Wage Increases and/or Sick Leave

Alaska’s Ballot Measure 1 includes a minimum wage increase (to $15/hour by 2027) and paid sick leave requirements.

California’s Proposition 32 is putting the state’s minimum wage on the ballot. If it passes, the minimum wage will be $18/hour – the highest in the nation.

Missouri voters will be considering a minimum wage increase (to $15/hour by 2026) as well as paid sick leave requirements.

Nebraskan voters will decide whether to include paid sick leave as state law.

Arizona and Massachusetts: Changes to Tipped Wages

Arizona’s Proposition 138 is generating national attention. It proposes to allow hospitality employers to pay a lower minimum wage for tipped employees. The proposed minimum wage for such workers is 25% less than the standard minimum wage as long as workers earn at least $2 an hour more than the standard minimum wage when tips are included in the calculations.

Like Arizona, Massachusetts is considering changing the way it handles tipped wages. The measure will determine whether to end the tip wage altogether and require hospitality employers to pay the standard minimum wage (currently $15/hour) regardless of how much workers earn in tips.

Florida, North Dakota, South Dakota, and Oregon: Cannabis

Measures in each state could put Florida and both Dakotas among the growing list of states that legally allow recreational sales and use. If voters approve the initiatives, employers will be dusting off their handbooks and considering how/if to update workplace policies.

Oregon has cannabis on the docket as well, but rather than deciding whether to legalize recreational use (which it did in 2014), Oregon voters will be deciding whether cannabis businesses will need to enter into a signed labor peace agreement with a labor organization to obtain or renew the state-required license from the Oregon Liquor and Cannabis Commission.

Massachusetts: Changes to Gig Workers

Massachusetts is busy on the workplace law front and each measure is a big one. In addition to the previously-mentioned measures to change minimum wages for tipped workers, voters will also decide on two competing measures about gig workers. One initiative would classify app-based drivers as independent contractors, while the other would allow them to unionize and engage in collective bargaining.

Finally, Massachusetts voters will also have the chance to determine whether the state will begin to provide regulated access to certain psychedelic substances like psilocybin and other psychedelics. Like the cannabis measures above, this isn’t directly related to the workplace, but may impact employers’ drug policies.

For examples of how this might look in practice, employers can look at states like Colorado (Proposition 122) and Oregon (Measure 109), which have both decriminalized these substances in recent years.

New York: Equal Protection Expansions

Voters in New York will be deciding whether …

If passed, the Equal Protection Amendment would expand existing protections (which prohibit discrimination based on race, color, creed, and religion) to include ethnicity, national origin, age, and disability, as well as sex, sexual orientation, gender identity, gender expression, pregnancy, pregnancy outcomes, and reproductive healthcare and autonomy. While board protections already exist, this measure would add them to the state constitution.

The Bottom Line

Businesses should be ready to modify pay structures, update leave policies, and revise employee handbooks quickly to stay ahead of these developments to ensure compliance. Whether these decisions directly affect your business or not, they could have a ripple effect across the country and every employer should monitor the outcomes closely and be prepared to adjust. Need an assist on the compliance front? Schedule a free consultation now.

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Essential Overtime Compliance Considerations When Reclassifying Employees to Non-Exempt
Essential Overtime Compliance Considerations When Reclassifying Employees to Non-Exempt 2560 1707 PayReel

With the Department of Labor’s (DOL) decision to increase the salary threshold for employees to be exempt from overtime pay, many employers will need to reclassify employees to non-exempt status. This status entitles employees to 1.5 times their pay rate when they work beyond a 40-hour week. To stay ahead of overtime compliance concerns, employers should conduct an internal audit of their overtime procedures and consider using a “percentage bonus” as part of their strategy to adjust to the guidelines and stay compliant.  

DOL Changes Necessitate Adjusting Overtime Compliance Procedures

Any employer that pays non-exempt employees bonuses should review overtime compliance obligations now. The DOL’s new rules will give more employees non-exempt status and goes into effect in early 2025.

Overtime compliance factors to review: 

  • New Salary Threshold: The U.S. Department of Labor’s (DOL’s) new salary threshold for the Fair Labor Standards Act’s (FLSA’s) “white-collar” exemptions will rise to nearly $59k. Only workers who pass the duties test and reach this threshold will be considered exempt from overtime pay obligations.
  • Reclassification: It may become more cost-effective to reclassify employees to non-exempt rather than raise their salary to meet the threshold. 
  • Regular Rate of Pay: Non-exempt employees are entitled to overtime premiums based on their “regular rate of pay.” This includes all types of compensation (including bonuses). For this reason, the “regular pay rate”  isn’t as simple as it may seem at first glance. Internal reviews require a thorough understanding of section 7(e) of the FLSA. 

Enter the Percentage Bonus 

Employers must consider bonus payments when calculating overtime under the FLSA. While most bonuses have to be included when calculating the regular rate, the percentage bonus allows employers to pay a bonus without factoring it into overtime pay calculations. This approach simplifies calculations. The bonus is calculated as a predetermined percentage of an employee’s total straight-time and overtime pay during the relevant period. To adhere to compliance standards, overtime pay must be included in the calculation. The predetermined percentage must not change in response to variations in hours worked, and the bonus amount cannot be a fixed sum that ignores fluctuations in overtime.

Alternatively, employers can distribute a bonus pool among employees based on their proportion of the total straight-time and overtime wages. Each employee’s share of the pool is calculated by dividing their wages by the total wages of all participants, then multiplying by the total bonus pool. This ensures that the bonus reflects the employee’s contribution to the overall work period, including overtime.

If an employer uses one of these percentage-based approaches to address the FLSA overtime ramifications of bonuses, it should also ensure the plan complies with standards in every way and is maintained properly going forward. 

The DOL says the method may be used only for true bonuses–as in those that are properly applied to a sum and paid as an addition to total wages. Such bonuses are usually attributed to extra effort, as a reward for loyal service, or as a gift. The term is improperly applied if it is used to designate a portion of regular wages that employees are entitled to receive under their regular wage contract. As always, employers should evaluate where this type of plan complies with applicable state and local requirements and ensure these bonuses are accurately and clearly explained to employees.

The Bottom Line

The DOL’s changes necessitate changes for all employers to stay compliant. Companies may be able to use a percentage bonus to simplify the changes while staying compliant with the new rules. If you would benefit from a conversation with overtime compliance pros to address questions or concerns, please schedule a free consultation now.  

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The Latest PAGA Update + Practical Tips for Employers
The Latest PAGA Update + Practical Tips for Employers 2560 1707 PayReel

The Private Attorneys General Act (PAGA) is making waves once again. In a significant ruling, the California Supreme Court has determined that public employers are not subject to PAGA—a statute that allows employees to file lawsuits on behalf of the state for Labor Code violations. This landmark decision brings clarity to the longstanding debate regarding whether public entities, such as cities, counties, and state agencies, fall under the statute’s jurisdiction.

Understanding PAGA

PAGA was enacted in 2004, empowering employees to step into the shoes of state regulators and file claims for Labor Code violations against their employers. These claims can lead to civil penalties, with a portion of the recovered penalties going to the state and the remainder to the aggrieved employees. Historically, the act has been applied broadly, impacting various industries and sectors across California. However, the recent ruling clarifies that public employers are exempt from these lawsuits.

Key Implications of the Ruling

  1. Distinguishing Between Public vs. Private Employers: The court’s decision solidifies the distinction between public and private employers under PAGA, ensuring that public agencies are not held to the same standards as private companies in the context of labor-related lawsuits.
  2. Impact on Labor Disputes: While public employers are no longer subject to PAGA, this does not absolve them of adhering to the state’s labor laws. Employees can still file complaints through other channels.
  3. Reduced Burden on Public Employers: One of the most significant outcomes of this ruling is the reduced burden on public agencies.

Practical Tips for Employers

Even though public employers are now exempt from PAGA, it’s essential for both public and private entities to remain vigilant in their labor law compliance. Here are practical steps employers should consider:

  1. Maintain Rigorous Compliance Procedures: Public employers should continue to follow all applicable Labor Code requirements, including wage and hour laws, meal and rest breaks, and workplace safety standards.
  2. Conduct Regular Internal Audits: Proactive measures such as regular audits can help identify potential labor code violations before they escalate. Reviewing employee records, wage payments, and workplace policies can ensure compliance with California’s complex labor laws.
  3. Stay Informed on Legal Changes: Although PAGA no longer applies to public employers, California labor laws are subject to frequent amendments and new regulations. Employers should monitor legal developments and work closely with appropriate partners to stay up-to-date on any changes that might impact their operations.
  4. Train Managers and Supervisors: Ensuring that management teams are trained on labor laws and employee rights can help prevent violations and mitigate potential legal issues.

The Bottom Line

The California Supreme Court’s ruling marks a pivotal shift for public employers, relieving them from PAGA-related litigation. However, the need for ongoing labor law compliance remains. By following best practices and maintaining a culture of compliance, public employers can avoid legal pitfalls. If your company would benefit from a partner in all things compliance, schedule a free consultation with the pros. 

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The Case for Embracing Digital Nomads
The Case for Embracing Digital Nomads 2560 1440 PayReel

A digital nomad is someone who uses technology to work remotely while traveling or living in different locations, often without a fixed home base. In recent years, the workforce has experienced a significant and rapid shift towards remote work and digital nomadism, with this article estimating that digital nomads make up nearly 11% of the U.S workforce (or 18.1 million workers). This trend has reshaped how organizations manage, engage, and retain talent.

Some organizations have resisted the shift, citing challenges such as coordinating across different time zones, communication barriers, and concerns about productivity. There are also compliance issues involved with engaging workers in various locations with different legal requirements, payroll guidelines, and tax laws.

Still, embracing the shift has benefits, too. For many companies, the cost savings associated with reducing overhead and the ability to access a broader talent pool are reason enough to overcome concerns. 

Strategies for Companies to Engage Digital Nomads

One of my client’s cardinal rules is “Make it easy for customers to give you their money.” If you’ve ever abandoned a vase in the Dollar Spot at Target or skipped your first choice for dinner because the line was too long, you understand. Surely this is part of the strategy behind Chick-fil’a’s system of moving cars through its lines with the speed and precision of a Navy Seals mission. Just make it easy breezy for people to hand over their lunch money and move right on through your line with their piping hot waffle fries and Chick-fil-a sauce. There’s a case to take a similar approach with digital nomads. If you want to attract the best talent and choose from a wider pool of prospects, you might want to consider making it easier for people to work for/with you. 

Here are a few ways:   

  1. Offer Flexible Work Hours: Allow digital nomads to manage their schedules across different time zones and focus on their results and deliverables rather than the schedule on which they deliver them.
  2. Provide Remote-Friendly Tools: Use collaboration platforms like Slack and Zoom for seamless communication and project management.
  3. Foster Community: Create virtual events, online meetups, or digital spaces for nomads to stay connected with the company culture.
  4. Incentivize with Travel Perks: Offer travel stipends, co-working space allowances, or support in obtaining remote work visas.
  5. Engage a Partner for Compliance: Engage a partner that specializes in worker classification, payroll services for contract workers, and compliance concerns to make engaging workers in various locations (and therefore, various rules) a non-issue.   

The Bottom Line

Engaging digital nomads presents both challenges and opportunities. While time zone differences, communication challenges, and compliance concerns can create obstacles, the benefits are compelling. Many organizations find gaining access to a much broader talent pool and reducing overhead costs make overcoming the challenges well worth the effort. As more of the workforce shifts towards flexible work arrangements, companies that effectively engage digital nomads will position themselves for long-term success in a dynamic, globalized world. If your company could benefit from making it easier for the best workers to join your team, schedule a free consultation with the pros to address any concerns you might have about worker classification, compliance, payroll, or more. 

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Landmark Decision: FTC’s Non-Compete Ban Overturned Nationwide
Landmark Decision: FTC’s Non-Compete Ban Overturned Nationwide 150 150 PayReel

The Federal Trade Commission’s (FTC) sweeping ban on non-compete agreements has been struck down for all employers across the United States. The decision marks a pivotal moment in employment law, shaking up employees’ and employers’ rights and responsibilities nationwide. The FTC had proposed the ban on non-compete agreements to boost competition and worker mobility, arguing that such agreements suppress wages and limit economic freedom. While worker advocates supported the move, business groups fiercely opposed it, claiming it would harm their ability to protect trade secrets and investments. Legal challenges followed and opponents argued that non-competes are governed by state law and the FTC overstepped its authority. A federal court ultimately ruled that the FTC had indeed exceeded its authority in trying to impose a nationwide ban on non-compete agreements and struck down the rule– affirming that regulating such agreements falls primarily under state jurisdiction. This ruling dealt a blow to proponents of the ban and left many workers wondering what the future holds for non-compete clauses.

Key Implications of the Decision 

The Impact on Workers

With the FTC’s non-compete ban overturned, the legal landscape remains uncertain for employees and employers alike. For now, non-compete agreements will continue to be governed by state law, which varies significantly across the country. Some states, such as California, have already imposed strict limitations or outright bans on non-competes, while others are more lenient.

For workers, this ruling means that their employment options may still be constrained by non-compete agreements depending on where they live. Many will continue to face barriers when they’re trying to switch jobs or start their own businesses, particularly in industries where non-competes are common. However, in some states, the ruling is unlikely to have a significant impact.

The Impact on Employers

The ruling preserves a business’s ability to use non-compete agreements as a tool to protect their interests. However, the ongoing legal and political debates surrounding non-competes suggest that further regulation may be on the horizon, whether through federal legislation or new state laws.

The Path Forward: What Comes Next?

While the court’s decision represents a setback for the FTC and worker advocates, the broader conversation about non-compete agreements is far from over. The ruling has renewed calls for legislative action at both the state and federal levels. Advocates for reform are pushing for clearer rules that balance the need to protect business interests with the rights of workers to move freely within the labor market.

At the state level, some lawmakers are already considering stricter regulations on non-compete agreements, especially for lower-wage workers and employees in sectors where these agreements are seen as particularly exploitative. States like Washington, Oregon, and Illinois have recently passed laws that restrict non-competes, and similar initiatives could gain momentum in light of the court’s ruling.

Meanwhile, discussions around federal legislation continue on Capitol Hill. While the FTC’s rule may have been blocked, it has spotlighted the issue, prompting lawmakers to consider more targeted approaches. Proposals for federal reforms could include limits on the use of non-competes for certain categories of workers, such as those earning below a certain wage or working in industries where non-competes are most frequently abused.

The Bottom Line

Overturning the FTC’s non-compete ban is a major development with wide-ranging implications for the American workforce and economy. While the court’s ruling preserves the status quo, it also underscores the complexities of balancing business interests with worker rights in a rapidly evolving labor market.

For now, workers and employers will continue to navigate a patchwork of state laws governing non-competes. Still, the ruling could spark renewed efforts to reshape the future of labor contracts and employment law in the U.S. With the continued focus on worker mobility and competition, the future of non-competes remains uncertain, and the debate over their role in the modern economy is likely far from over.

Stay tuned as the conversation evolves and more legal battles, state initiatives, and federal proposals emerge in response to this significant ruling.

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