Providence, R.I. (January 19, 2022) -  2021 was a productive year for the members of the Rhode Island General Assembly. Against the backdrop of the ongoing COVID-19 pandemic, the Assembly passed several significant pieces of labor and employment legislation. Out of the remote hearings of the socially distant session emerged a bill to comprehensively address wage discrimination on the basis of protected class; a bill to gradually increase the state minimum wage; a bill to increase paid leave benefits under the Temporary Caregivers' Insurance (TCI) program; a bill to close a loophole in the state's sick and safe leave law; a bill to reform the state's unemployment benefits system; and a bill to further entrench Sunday and holiday premium pay requirements in Rhode Island law.

What follows is a brief overview of the most important employment law developments of 2021 as well as proactive tips for Rhode Island employers and HR professionals preparing for the effective date of the new pay equity law.

Pay Equity

When the 2021 legislative session began, Rhode Island already had a pay equity law on the books. The focus of the law was on ensuring pay equity between the sexes (i.e., equal pay for equal work), unless a pay differential was based on one of several permissible factors.

Over time, the ascendant progressive caucuses of the House and Senate began to assert that the existing law was not doing enough to combat Rhode Island's stubbornly persistent gender pay gap. Additionally, they pointed to other flaws in the law:

  • It offered no protection to members of legally protected classes other than sex/gender.
  • It contained a narrow legal standard of "equal pay for equal work" that made it difficult for plaintiffs to recover.
  • It placed no limits on the use of wage history during the hiring process, thereby allowing discriminatory wage differentials to become "baked in" over time.
  • It did not require employers to create wage ranges for jobs, allowing for discriminatory considerations of protected class status to creep into compensation decisions.
  • It contained penalties that were too low to have a deterrent effect.

On July 6, 2021, Rhode Island Governor Daniel McKee signed into law a bill that comprehensively addresses wage discrimination in Rhode Island. Some of the highlights of the new pay equity law include the following:

  • The law prohibits wage discrimination on the basis of all legally protected classes under Rhode Island law.
  • The law replaces the legal standard of "equal pay for equal work" with one of "comparable work." The drafters of the law intended to expand the pool of employees who can be compared to determine if their pay is, in fact, equitable.
  • The law places new limitations on the use of wage history information during the hiring process.
  • The law imposes an affirmative obligation on employers to create wage ranges for all new and existing positions.
  • The law significantly enhances the penalties for violation. Whereas recovery under the existing pay equity law was limited to back pay, liquidated damages equal to the amount of back pay, and fines of up to $200, the new pay equity law allows for recovery of compensatory damages up to $10,000, punitive damages, equitable relief, attorney's fees and costs, and a sliding scale of civil penalties to the Rhode Island DLT ranging from $1,000 - $5,000 per violation.
  • The law creates a time-limited affirmative defense for employers that conduct good faith self-evaluations of their pay practices and correct any unlawful wage disparities that they uncover.

With less than a year to go before the effective date of the new pay equity law, there are many things that employers can do to proactively prepare for January 1, 2023:

  • The Rhode Island Department of Labor and Training (DLT) is in the process of developing new legal postings summarizing employee rights and employer obligations under the new law. Once these postings are released, employers will need to ensure that they are displayed prominently in the workplace and disseminated to remote employees.
  • Employers should begin documenting the reason or reasons for wage differentials, particularly in starting pay rates. With the passage of time, it may not be entirely clear whether permissible factors such as education, training, or seniority were used as the basis for compensation decisions.
  • Wage history inquiries should be removed from job applications.
  • Recruiters and others involved in talent acquisition need to be trained about the new limitations on the use of wage history information during the hiring process.
  • Employers should begin the process of establishing wage ranges for their existing positions. Additionally, they should consider developing written guidelines for establishing wage rages for newly created positions. These guidelines will ensure consistency and prevent unlawful consideration of protected class in compensation decisions.
  • Under attorney-client privilege, employers should conduct a fair pay analysis to identify and remedy unlawful pay gaps. Until June 30, 2026, this will provide a complete affirmative defense to liability.
  • Finally, employers should audit their job descriptions to ensure that their privileged pay audit is comparing the "right" employees. The focus of this audit should be on the elements of "comparable" work – i.e., the skill, effort, responsibility, and working conditions under which the jobs are performed.

Minimum Wage 

On May 20, 2021, Governor McKee signed into law legislation to gradually raise the minimum wage in Rhode Island from $11.50 per hour to $15 per hour over the next four years.

According to the bill sponsors, this legislation will bring Rhode Island into line with neighboring states and will make progress toward eliminating poverty, homelessness, and food insecurity in our state.

The bill will increase the minimum wage from $11.50/hour to:

  • $12.25 on January 1, 2022
  • $13 on January 1, 2023
  • $14 on January 1, 2024
  • $15 on January 1, 2025

The Rhode Island DLT estimates that the new law will raise the wages of approximately 140,000 Rhode Islanders by 2025.

Temporary Caregivers' Insurance

On July 7, 2021, Governor McKee signed into law legislation to increase temporary caregiver insurance (TCI) benefits and leave over the next two years.

Administered by the Rhode Island DLT, the TCI program provides eligible employees with paid benefits and leave to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law, or grandparent. TCI benefits and leave are also available for eligible employees to bond with a newborn baby or a child newly placed with the employee for adoption or foster care.

Similar to leave under the federal Family and Medical Leave Act (FMLA) and the Rhode Island Parental and Family Medical Leave Act (RIPFMLA), leave under the TCI program is job-protected. Upon the conclusion of a TCI leave, the employee must be returned to their position or a position with equivalent seniority, status, employment benefits, and other terms and conditions of employment, including fringe benefits and service credits.

Since the TCI law was enacted in 2014, TCI benefits have been capped at four weeks of paid leave per benefit year. Starting on January 1, 2022, TCI benefits increased to five weeks of paid leave per benefit year. On January 1, 2023, the maximum benefit will increase to six weeks of paid leave.

Paid Sick and Safe Leave

On July 7, 2021, Governor McKee signed into law legislation to ensure that workers in the construction industry have access to paid sick and safe leave benefits.

Enacted in 2018, the Rhode Island Healthy and Safe Families and Workplaces Act provides that all employees employed by an employer with 18 or more employees in Rhode Island will accrue a minimum of one hour of paid sick and safe leave time up to a maximum of 40 hours per calendar year. Paid sick and safe leave may be used for the following qualifying reasons:

  • An employee's mental or physical illness, injury, or health condition;
  • An employee's need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition;
  • An employee's need for preventive medical care;
  • An employee's need to care for a family member with a mental or physical illness, injury, or health condition;
  • An employee's need to care for a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition;
  • An employee's need to care for a family member who needs preventive medical care;
  • Closure of the employee's place of business by order of a public official due to a public health emergency or an employee's need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency, or care for oneself or a family member when it has been determined by the health authorities having jurisdiction or by a healthcare provider that the employee's or family member's presence in the community may jeopardize the health of others because of their exposure to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease; or
  • Time off needed when the employee or a member of the employee's family is a victim of domestic violence, sexual assault, or stalking.

The law permits employers to require a waiting period of up to ninety (90) days before a newly hired employee can use their accrued sick and safe leave time for a covered purpose.

Due to the transient nature of work in the construction industry, many construction workers found themselves outside the protections of the law. Because construction workers often work on a project for a short time before moving on to another, they often lose their accrued sick and safe leave time whenever they move to a new project. This legislation was designed to close the construction industry loophole.

The paid sick and safe leave law now requires construction employers using multi-employer collective bargaining agreements to pay sick and safe leave time into a central trust which then pays out the earned sick and safe time as it is needed by individual workers.

Unemployment Insurance

On May 21, 2021, Governor McKee signed into law legislation that made it easier for Rhode Islanders to transition back into the workforce as the state began to emerge from the COVID-19 pandemic.

During the height of the pandemic, many Rhode Island employers – particularly in service industries like hospitality – struggled to fill open positions. One of the reasons was that many Rhode Islanders were collecting unemployment insurance (UI) benefits that were more generous than the amount that they received as wages before the pandemic closed their workplaces.

This law allowed those receiving unemployment benefits to go back to work and earn up to 150% of their unemployment insurance benefit amount – not including any federal unemployment boosts in effect at the time – before being cut off from unemployment. Prior to the law's enactment, claimants would automatically lose their benefits once they began earning more in wages than their state UI benefit.

The law also increased the amount that people can earn before having their UI benefits reduced. Rhode Islanders are now able to earn up to one-half of their UI benefit amount before having any of their earnings subtracted from their benefits. Prior to law's enactment, the threshold was only 20% before a reduction would occur.

Sunday and Holiday Premium Pay

By 2023, Rhode Island will have the dubious distinction of being the only state in the country that requires employers to pay a premium for work performed by non-exempt employees on Sundays and all legal holidays.

Unlike most other jurisdictions, which have eliminated so-called "blue laws," Rhode Island is moving in the opposite direction. Only July 6, 2021, Governor McKee signed into law a bill that repealed Section 25-3-7 of the Rhode Island General Laws. This section previously allowed the Director of the Rhode Island DLT to grant exemptions from Sunday and holiday premium pay requirements. At this time, it is unclear whether the DLT will attempt to revoke any exemptions previously granted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.