Missouri’s Paid Sick Leave Law: Quickly Approaching Deadline on April 15, 2025

In November 2024, Missouri voters approved Proposition A, which provided increases to Missouri’s minimum wage and requires most private employers (even most small businesses!) to provide paid sick leave to employees (with very limited exceptions such as employees of businesses whose annual gross volume sales is less than $500,000, casual babysitters, and golf caddies), beginning on May 1, 2025. The law requires covered employers to pay employees sick leave which accrues at one hour per every 30 hours worked up to 40 hours per year if the employer has fewer than 15 employees or up to 56 hours per year if the employer has 15 or more employees.

There is a lawsuit challenging the constitutionality of the new law, which is still under review by Missouri Supreme Court. In addition, House Bill 567, which was passed by the Missouri House of Representatives, but is under review by the Senate, seeks to repeal the paid sick time altogether. However, the current bill does not contain an emergency clause, so if it passes as is, it will not go into effect until August 28, 2025, which is after the paid sick leave law goes into effect on May 1, 2025.

The deadline of April 15, 2025, when all Missouri employers subject to this new law must provide written notice to their employees about the paid sick leave benefits and display a poster about the same, is quickly approaching. Links to language for the written notice and the poster can be found here:

Notice: https://labor.mo.gov/media/pdf/earned-paid-sick-time-notice-ls-122
Poster: https://labor.mo.gov/media/pdf/earned-paid-sick-time-ls-121

What Should Employers Do?
Absent a ruling by the Missouri Supreme Court invalidating the new law, covered Missouri employers should give the required notice and post the required poster on April 15, 2025 (not before).

The written notice (language in the link above) must be provided to employees on a single piece of 8.5 x 11 paper in no less than 14-point font. Considering the requirement references that the notice must be given on a single piece of paper, it is recommended that each employee be provided with a physical copy of the notice, rather than electronic copy of the notice via e-mail.

The required poster (see link above) should be displayed in the same location that the employer’s other employment posters (workers’ compensation, minimum wage, employment discrimination, etc.) are located.

Between now and May 1, 2025, covered employers should plan with their internal teams and payroll providers as to how they will account for their employees’ accrued paid sick leave. They should also review their current PTO policies and work with an employment law attorney, such as the attorneys at Danna McKitrick, to discuss how the new law will affect their current policies if the new law does go into effect on May 1, 2025.

FAQs About Missouri’s New Paid Sick Leave Law

Q1. What can earned paid sick time be used for under the new Missouri law?
A1. Earned Paid Sick Time can be used for:

Q2. How do employees earn paid sick leave?
A2. All covered employees accrue one hour of earned paid sick time for every 30 hours worked. The hours do not need to be consecutive or worked in a week. Part-time employees also accrue earned paid sick time, regardless of how limited the employee’s schedule is. Salaried-exempt employees are assumed to have worked 40 hours in each work week (unless their regularly-worked hours worked are less than 40 hours per week).

Q3. How much paid sick leave can an employee use per year?
A3. For employers with less than 15 employees, employees can use up to 40 hours of paid sick time per year. For employers with more than 15 employees, employees can use up to 56 hours of paid sick time per year. While there is a limit on how many hours of sick leave employees are entitled to use, the law does not limit how many hours employees are entitled to accrue.

Q4. We already offer a gratuitous PTO policy that provides employees with more leave than the new paid sick leave law requires. Does our PTO policy comply with the new sick leave law?
A4. Missouri’s new paid sick leave law provides that an employer with a paid leave policy who makes available an amount of paid leave sufficient to meet the accrual requirements and may be used for the same purposes and under the same conditions as earned paid sick time under the new law is not required to provide additional paid sick time under the new law. However, this is a high burden to reach. Answer these questions:
1) Does your PTO policy provide PTO for part-time employees?
2) Does your PTO policy allow for immediate accrual upon the first day of hire?
3) Does your PTO policy allow employees to use PTO for the numerous reasons set out in the new paid sick leave law (domestic violence, sexual assault, stalking, counseling, or any of the same for a family member, etc.)?
4) Does your PTO policy allow for roll over or pay out in lieu of roll over?
5) Does your PTO policy allow for employees to use PTO days without notice where the need is not foreseeable without discipline?

These are just a few issue-spotting questions and the answers for most employers are “no.” With that said, assuming the new paid sick leave law goes into effect on May 1, 2025, it is going to require most employers to revise their policies.

As mentioned above, it is important to review your business’ current employment policies and consult with counsel or contact a Danna McKitrick employment law attorney to determine how this new paid sick leave law may affect your company’s current policies.

Updated Information on the FTC Non-Compete Ban

A federal court has issued a final order declaring the FTC’s ban of non-compete agreements invalid.  The federal district court in Texas held in its final order that the rule was “arbitrary and capricious” and exceeded the FTC’s statutory authority. As a result, the FTC cannot enforce the rule against any employer, anywhere in the country, and there is no longer a nationwide ban of non-compete agreements.  While there is no nationwide ban of non-compete agreements, it is important to keep in mind that several states have fully banned non-compete provisions (California, Colorado, Oklahoma, North Dakota, and Minnesota), and many other states have banned non-compete provisions in certain circumstances.  Just as one example, in Illinois, non-compete agreements cannot be enforced against employees unless they earn at least $75,000, and there are specific statutes restricting enforcement in certain industries, such as construction, healthcare, and broadcasting.

The FTC may appeal this judge’s decision and it is always possible that there will be future attempts to ban non-compete agreements by rule or law. Therefore, we highly recommend considering other strategies for protecting your company’s proprietary information, such as non-solicitation agreements, confidentiality agreements, and trade secret enforcement. Feel free to contact us if you have any questions or would like to discuss more.

Learn more about this update by viewing the video FTC Ban on Non-Competes Blocked by Federal Court in Texas.

For details on the FTC ban on non-competes, go to Navigating the FTC’s Non-Compete Ban: Strategies for Protecting Proprietary Information. You may also view the video here: FTC’s Ban of Non-Compete Agreements. Continue reading »

Five Common Mistakes Business Owners Make When Organizing an LLC in Missouri

1. Not Having an Operating Agreement

An Operating Agreement (“OA”) is a crucial document that establishes the ownership of the LLC, the rights and duties of the company’s members and managers, and the operating rules for the company. While the OA is not filed with the Missouri Secretary of State (“SOS”), it is required by law. Without an OA, your LLC runs the risk of losing its limited liability protection and the members of the LLC could be held personally liable.

2. Not Updating the Operating Agreement

The OA establishes the ownership of the LLC, how the LLC conducts its business, and how it is taxed.  There are several ways for an LLC to be taxed, including as a disregarded entity or an S-corporation.  Including this in the OA and acting in accordance with the OA are very important.  If tax status, ownership, or any other portion of the OA changes, it should be promptly amended to reflect the change(s).

3. Not Registering a Fictitious Name Used By the LLC

If an LLC transacts business in a name other than the legal entity’s name, that name must be filed as a fictitious name (also known as a “d/b/a” or “doing business as”) with the SOS. A fictitious name is any name business is transacted under other than the true name of the legal entity. For example, if the legal name of the LLC is “Flett Enterprises, LLC” and it owns a restaurant named “Andy’s BBQ,” the owner should register “Andy’s BBQ” as a fictitious name. If not, the owner(s) risk personal liability for operating “Andy’s BBQ” in their individual capacity. Continue reading »

Non-Compete and Non-Solicitation Agreements Under Attack!

Soon companies may be prohibited or severely limited from using employee non-compete and non-solicitation agreements. The Federal Trade Commission’s (FTC) January 2023 proposed Non-Compete Clause Rule would prohibit employers from using non-compete agreements with any employee or independent contractor, paid or not, with very limited exceptions. The proposed rule is retroactive requiring employers to rescind all existing non-compete agreements and notify workers that these agreements are no longer in effect.

The FTC’s proposed rule does not prohibit customer or employee non-solicitation agreements unless they are overly broad. The proposal indicates that eradicating non-compete agreements is a priority for the FTC. The vote is scheduled for April 2024 and will likely be subject to extensive litigation if passed.

In May 2023, Jennifer Abruzzo, the National Labor Relations Board (NLRB) General Counsel, issued a memorandum stating that offering, upholding, and enforcing non-compete agreements may interfere with Section 7 of the National Labor Relations Act (NLRA). Employees could interpret the agreements as creating a lack of employment mobility by denying them the ability to quit or change jobs or by blocking access to other employment opportunities. Non-compete agreements could be lawful if they are narrowly tailored and only restrict individuals’ managerial or ownership interests in competing businesses or true independent contractor relationships. According to the memorandum, the NLRB will focus on pursuing enforcement actions against employers utilizing non-compete agreements. Continue reading »

Illinois Passes Freelance Workers Protection Laws: Understanding the Freelance Worker Protection Act

Authored by Katherine M. Flett with assistance from Kristina M. Stevenson, contributor

In a pioneering move, Illinois has become the first state to enact comprehensive protection laws for freelance workers. The Freelance Worker Protection Act (FWPA), set to take effect on July 1, 2024, introduces stringent regulations governing the engagement, treatment, and compensation of freelance workers within the state. This legislation, which is gaining steam nationwide with other states, aims to safeguard the rights and interests of freelance workers, who play an increasingly vital role in today’s dynamic economy.

Defining Freelance Workers

The FWPA defines a freelance worker as an independent contractor who offers products or services within Illinois or for Illinois-based entities, in exchange for compensation exceeding $500. This compensation can stem from a single contract or multiple contracts over a 120-day period. However, certain exceptions apply. Construction service providers, employees of construction contractors, and those already subject to traditional employer-employee relationships under the Illinois Wage Payment and Collections Act are excluded from the definition.

Key Protections Offered by FWPA

The FWPA outlines three requirements regarding hiring freelance workers: Continue reading »

NLRB Decision Places Limits on Non-Disparagement Provisions in Severance Agreements

Authored by Katherine M. Flett with assistance from Kristina M. Stevenson, contributor

Non-disparagement clauses have historically been a common element of severance agreements and aim to protect an employer’s name from negative commentary by a former employee to others. The severance agreement is a contract that outlines the compensation and benefits an employee will receive in exchange for the release of any and all employee claims against the employer arising out of the employment relationship.

Confidentiality clauses limiting an employee’s right to disclose the terms of a severance agreement have also been a common element of severance agreements.

A recent National Labor Relations Board (NLRB) decision has placed a warning sign on all employment severance agreements. Retroactively, the NLRB’s decision in McLaren Macomb may invalidate non-disparagement and confidentiality clauses in severance agreements both before and after February 21, 2023. Generally, employers are now prohibited from proffering severance agreements that require non-supervisory employees to broadly waive their rights under Section 7 of the National Labor Relations Act (NLRA) in exchange for severance benefits.

Under the NLRA, Section 7 and Section 8(a)(1) work together to protect an employee’s right to unionize, assist labor organizations, and engage in concerted activities. Employers may not interfere with the Section 7 rights of their employees. To assist in understanding how non-disparagement and confidentiality clauses interfere with Section 7 rights, NLRB General Counsel Jennifer Abruzzo issued a memorandum providing guidance for the applicability of the McLaren Macomb decision.

Five Major Takeaways from the McLaren Macomb Decision Continue reading »

Sexual Harassment Policies for the Trucking Industry: Best Practices

The current over-the-road driver shortage has created increasing pressures for trucking companies of all sizes. As a result, some trucking companies may be reluctant to terminate – or to not hire – drivers who have been accused of sexual harassment. But this reluctance may not be a good idea in light of Title VII.

Title VII of the Civil Rights Act of 1964 prohibits sexual harassment and retaliation against any employee who complains of sexual harassment to an employer. In addition, Title VII complaints can be filed in any judicial district where: the harassment was alleged to have been committed; the employment records relevant to the harassment claim are maintained and administered; the complainant worked; or if the employer cannot be “found” in one of the first three districts, the complaint can be filed in the district of the employer’s principal place of business.

Continue reading »

Unpaid Leave for Victims of Domestic or Sexual Violence Now Required in Missouri

Authored by Katherine M. Flett with assistance from Haley E. Gassel, contributor

Missouri employers must now provide unpaid leave and accommodations to employees due to domestic or sexual violence under the Victims’ Economic Safety and Security Act (VESSA).

Employers Covered Under VESSA

• Employers with 1-19 employees are not subject to these requirements.
• Employers with 20-49 employees are required to provide one week of unpaid leave per year to employees covered under these statutes.
• Employers with 50 or more employees are likewise required to provide two weeks of unpaid leave per year to employees covered under these statutes.

Employees Eligible for Unpaid Leave or Accommodations under VESSA

VESSA applies to employees of covered employers who are victims of domestic or sexual violence, or whose family or household member is a victim of domestic or sexual violence. A family or household member is a spouse, parent, daughter, son, someone related by blood or by marriage, someone who shares a relationship through a son or daughter, and anyone jointly residing in the same household.

Reasonable Accommodations

Employers and public agencies are required to make reasonable safety accommodations to the known limitations resulting from circumstances relating to being a victim of domestic or sexual violence or a family or household member of domestic or sexual violence. Reasonable accommodations include: Continue reading »

Religious Exemptions to COVID-19 Vaccination Mandates under Title VII and the EEOC’s Additional Guidance

With continued and widespread COVID-19 infection and the FDA’s full approval of the Pfizer-BioNTech COVID-19 vaccine, many employers have instituted COVID-19 vaccination mandates. Title VII requires employers to provide reasonable accommodations for employees with sincerely-held religious beliefs that conflict with getting vaccinated. Given that religious beliefs are difficult to disprove, many employees have taken this as an opportunity to request religious exemptions to avoid COVID-19 vaccination mandates.

The Law – Title VII

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of religion and requires employers to provide reasonable accommodations to employees claiming their sincerely-held religious beliefs conflict with getting vaccinated. Title VII protects not only people who belong to traditional, organized religions, such as Buddhism, Christianity, Hinduism, Islam, and Judaism, but also others who have “sincerely-held religious, ethical or moral beliefs.”

Given this sweeping definition of religion, the U.S. Equal Employment Opportunity Commission (“EEOC”) has cautioned that an employer should generally assume that an employee’s request for a religious accommodation is based on a sincerely-held religious belief. Nevertheless, an employer is permitted to question the sincerity of an employee’s purported religious belief where there is an objective basis for doing so. Further, an employer is not required to accommodate an employee’s religious beliefs and practices if doing so would impose an “undue hardship” on the employer’s legitimate business interests. For the EEOC’s list of factors to be considered when determining whether an accommodation imposes an undue hardship on an employer, visit: EEOC Undue Hardship.

The EEOC’s Guidance on Religious Exemption Requests

On October 25, 2021, the EEOC updated its technical assistance related to the COVID-19 pandemic, which included additional guidance on how employers should handle religious exemption requests (Section L). Read the full EEOC update here.

The key takeaways are:

1. Employees who have a religious objection to receiving a COVID-19 vaccination must inform their employer and request a reasonable accommodation to be afforded protection under Title VII. Reasonable accommodations may include telework or reassignment.
2. If an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, the employer can make a limited factual inquiry seeking additional supporting information.
3. An employer who objectively demonstrates that it would be an “undue hardship” to accommodate an employee’s request for religious exemption to the employer’s vaccination mandate is not required to provide the accommodation.
4. An employer is not required to grant all employees’ requests for religious exemptions on the basis that it has granted some employees requests for religious exemptions. The determination is fact-intensive and specific to every request.
5. While an employer should consider the employee’s preference, if there is more than one reasonable accommodation that would resolve the conflict between the vaccination requirement and the religious belief without undue hardship, the employer may choose which accommodation to offer.
6. An employer has the right to discontinue a previously granted religious accommodation. If the employer learns that the belief is not religious in nature or sincerely-held, or if the accommodation becomes an undue hardship, the employer can discontinue the accommodation.

Continue reading »

Changes Coming to Illinois Non-Compete and Non-Solicit Law

Authored by Katherine M. Flett with assistance from Haley E. Gassel, contributor

On August 13, 2021, Governor JB Pritzker signed SB 672 into law, amending the Illinois Freedom to Work Act, the state’s restrictive covenant statute. Going into effect on January 1, 2022, the new bill will only apply to restrictive covenants entered into on or after January 1, 2022.

Compensation Thresholds

In SB 672, the Illinois legislature reserved non-compete and non-solicit agreements for higher paid employees. The law prohibits employers from imposing non-compete agreements on employees earning less than $75,000 annually or non-solicitation agreements on employees earning less than $45,000 annually. Earnings are defined broadly to include compensation, salary, bonus, commission, or any other form of taxable compensation on the employee’s W-2 plus any elective deferrals. These salary thresholds will increase over time, beginning in 2027.

Other Prohibitions

SB 672 includes a special provision for employees furloughed or laid off “as the result of business circumstances or governmental orders related to the COVID-19 pandemic” or under similar circumstances. A non-competition or non-solicitation agreement may not be entered into under these circumstances unless enforcement of the agreement provides for “compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.”

Non-competition and non-solicitation agreements are illegal for non-managerial or non-administrative employees in construction or employees covered by collective bargaining agreements under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.

Employees’ Rights

If an employee is not advised by the employer in writing to consult with an attorney before entering into a non-competition and non-solicitation agreement, the agreement is invalid. Likewise, if an employee does not receive a copy of a non-competition and non-solicitation agreement before starting employment or with at least 14 days to review the covenant, the agreement is invalid. The employee may sign the agreement before the 14-day period has ended.

An employee that successfully defends against an employer’s enforcement of a non-competition or non-solicitation agreement not to solicit shall recover from the employer all costs and reasonable attorney’s fees, along with any other appropriate relief.

Requirements for a Restrictive Covenant to be Valid

Continue reading »