A new report from labor and employment firm Littler Mendelson PC reveals the top five employment law changes to closely monitor this year, according to insight gathered from in-house attorneys, HR pros and C-suite execs across the U.S.
So what’s keeping your peers up at night?
In its 11th annual survey, Littler highlighted evolving legislation that should be on your radar now.
5 employment law changes to watch
1. Paid sick and family leave requirements
Just over 70% of employers expect paid sick and family leave requirements to be the biggest employment law change affecting their company over the next year, the survey revealed.
It’s no surprise paid sick and family leave tops the list this year, considering the hodgepodge of legislation at state and local levels.
For example, several states (California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island and Washington) and the District of Columbia already have paid family leave laws – so employers must meet legal obligations under both state and federal laws.
2. Income-related equality
About two-thirds (67%) of respondents believe legislation related to income equality will significantly impact their work in the coming year – and 54% say they’re concerned about lawsuits focusing on pay practices and wage-and-hour disputes.
Employment law changes to watch in this area include legislation on pay transparency, salary history bans and overtime pay, the survey found.
An increasing number of bans on asking about salary history has led to additional training for managers involved in interviewing and hiring.
As for overtime changes, earlier this year, the U.S. Supreme Court held that high-earning employees are not exempt from overtime under the FLSA if they’re paid on a daily basis.
Plus, more overtime changes could soon be on the way, as the Department of Labor has projected that it will issue a new proposed overtime rule this month.
3. Data privacy regulations
More than half (54%) of respondents anticipate employment law changes for data-privacy regulations – an 11% jump from the level of anticipated changes reported in the firm’s 2022 survey.
Despite that increase, only 17% of respondents expressed concern over litigation related to employee privacy.
Two pieces of notable legislation come to mind:
- The California Privacy Rights Act (CPRA) took effect on Jan. 1 and becomes enforceable on July 1. Among other things, the CPRA requires a privacy notice to be given to employees and applicants at the time a company collects their personally identifiable information.
- The Illinois Biometric Information Privacy Act (BIPA) regulates how employers can use the biometric identifiers (e.g., a retina scan, fingerprints, voiceprints, scans of hand or face geometry) used in the course of business. Biometrics can be used in time management systems, security systems and health plans. Among other things, the BIPA prohibits employers from selling, disclosing or profiting from employees’ biometric identifiers.
Public interest continues to shift to the growing belief that individuals own their personal info and have the right to control it. As such, HR can expect to see more regulations affecting HR data. Currently, three more states – Colorado, Connecticut and Utah – have pending data privacy legislation that will take effect in the second half of 2023.
4. Diversity, equity and inclusion (DEI) considerations
Just over half (53%) of respondents expect evolving DEI legislation to impact their companies this year.
And while only 22% are specifically concerned about DEI litigation, it’s worth noting that 58% also expressed concern about discrimination and harassment lawsuits.
One of the most significant DEI-related legal initiatives right now, CROWN Act legislation continues to gain steam. Earlier this year, Minnesota became the 20th state to prohibit natural hair discrimination.
In addition, legislatures in at least seven states (Michigan, New Hampshire, North Carolina, Pennsylvania, Rhode Island, South Carolina and Wisconsin) are working to pass similar laws to ban hair discrimination.
And size discrimination is also making headway at local levels. Most recently, legislators in New York City passed a bill that prohibits workplace discrimination based on employees’ height and weight. The mayor is expected to sign the legislation later this month.
Six other cities (San Francisco, CA; Santa Cruz, CA; Urbana, IL; Binghamton, NY; Madison, WI; and Washington, D.C.) have similar legislation, but NYC is by far the largest — which may prompt other cities to join the list.
5. Union protections and NLRB rulings
And rounding out the top five, union protections and NLRB rulings have more than a third (36%) of respondents expecting changes this year – and 24% are concerned about litigation focusing on labor and management relations.
As you probably recall, a notable NLRB ruling earlier this year restricted employers’ ability to include confidentiality and non-disparagement clauses in severance agreements for non-supervisory employees.
And in another recent ruling, the NLRB ripped Starbucks, saying the company attempted to squelch union activity. It ordered significant relief, including reinstating fired workers and requiring the company to bargain with the union.
Honorable mention: Classification of independent contractors
We have to include an honorable mention for the classification of independent contractors (ICs), which narrowly missed securing a spot in the top five.
One-third (33%) of respondents expect to see related changes in this area, which may come to pass if Acting Secretary of Labor Julie Su is confirmed.
During her tenure in California, Su was a proponent of AB5, a law that made it more difficult for employers in the state to classify workers as independent contractors. We’ll keep you posted.