10 Big Employment Law Trends to Watch This Year

A new survey from global law firm Norton Rose Fulbright reveals the top employment law trends to closely monitor this year, according to insight from employers across the U.S.

The survey aims to get a handle on what businesses are experiencing and what they think is coming, according to Norton Rose Fulbright employment and labor partner Jamila S. Mensah, who recently shared some insight with HRMorning on employment law trends that should be on HR’s radar now.

Nearly half (49%) of survey respondents reported being involved in employment law and labor disputes. That’s down from the previous year when nearly two-thirds of respondents reported facing such litigation.

“This drop may be attributed to factors such as better training and more sophisticated reporting and investigation practices among employers, which allow clients to avoid or minimize litigation risk,” Mensah said.

Even so, 42% of respondents said they expected their organizations to be more exposed to employment law and labor disputes over the next year.

Here’s what kind of employee lawsuits respondents are expecting to see in 2024.

Employment law trends: What should be on HR’s radar

1. Discrimination and harassment

Nearly half (44%) of respondents said discrimination and harassment issues are likely to expose employers to labor and employment law disputes in 2024, the survey revealed.

Discrimination and harassment claims in the workplace must be based on one of the protected categories under the law, Mensah pointed out.

2. Pay issues

More than one-third (39%) of respondents said they believe pay issues will open employers up to labor and employment law disputes.

Specifically, the survey listed issues, such as pay equity trends, evolving pay transparency laws and wage-and-hour disputes.

With more and more jurisdictions adopting pay transparency laws, employers will have to track evolving legislation to stay on the right side of the law. If you missed it, here’s a rundown of pay transparency legislation by state.  

“On a base level, regular reviews and audits of pay scales is something everyone should be doing, regardless of whether they operate in a jurisdiction that has laws on the topic,” Mensah said.

3. Employee classifications

In addition, 37% of respondents said employee classification issues were likely to cause employers to face more employment law litigation risks.

For example, the survey respondents said they believe gig workers present legal risks. This concern is timely, as the rise of the freelance economy has presented HR with new responsibilities and challenges.

In this same category, independent contractor (IC) issues present concerns, respondents said. As you probably remember, the DOL issued a final rule for ICs – and it’s set to take effect on March 11.

The shifting obligations could open employers up to more employment law challenges and complaints.

4. Data management and privacy requirements

More than one-third (36%) of respondents said employee data management and data privacy issues are likely to increase in 2024.  

As public interest continues to shift to the growing belief that individuals own their personal info and have the right to control it, HR can expect to see more employment law regulations affecting HR data.

For example, data privacy legislation in several states – including Colorado, Connecticut and Utah  – took effect in the latter half of 2023. Now, employers are adjusting to new employment law obligations.

5. Disability accommodations

Similarly, 36% of respondents also said disability accommodation issues are likely to make employers more exposed to labor and employment law disputes over the next year.

In FY 2023, the EEOC filed 48 disability accommodation lawsuits, almost doubling the 27 ADA cases it filed the previous year.

The agency, through its conciliation process, has also negotiated some hefty ADA settlements for employees and applicants who were denied accommodations by employers. It’s logical to conclude that this trend will continue.

6. Wrongful terminations

Nearly one-third (31%) of respondents said employers could face more litigation risks in the coming year due to a likely increase in wrongful termination claims.

In light of TikTok’s “Get Laid Off With Me” trend, where employees film themselves getting fired or laid off, and the widespread layoffs happening, it’s no surprise that many employers are bracing for more wrongful termination claims.

Employers that are conducting layoffs may want to consider severance packages to help reduce legal liabilities and mitigate the risk of employment law claims.

7. Use of AI in hiring and other employment decisions

More than a quarter (28%) of respondents said the AI boom – particularly regarding hiring and other employment decisions – may lead to increased claims.

Efforts to streamline processes, to make things more efficiently run through AI, are logical – but AI hiring bias is still in the spotlight.

The inherent bias in programming does exist, Mensah said. The technology is getting better, but it still has room for improvement.

So what’s the takeaway here?

“As with any tool, don’t rely on AI to run on its own without any supervision or test cases,” Mensah explained. “A company’s checks and balances can help ensure AI innovations are helping the company rather than hurting what you’re trying to do.”

8. Paid sick and/or family leave requirements

The survey revealed that 27% of respondents believe paid leave laws will prompt more legal action.

More states and municipalities are passing paid family and medical leave laws, which means more employers must comply at the federal, state and local levels.  

9. Varying workplace requirements and regulations across jurisdictions

Nearly one-fourth (24%) of respondents said juggling employment law compliance issues across jurisdictions will likely result in more claims.

Take the pay transparency example. As more and more jurisdictions pass varying legislation, multistate employers will have to figure out how to comply with a hodgepodge of laws.

“The broadest approach may be the easiest,” Mensah said. “Figure out which jurisdiction has the strictest law and consider whether it’s reasonable to apply that to the company’s practices generally. If the company is complying with the strictest law, that should check the boxes everywhere and simplify processes for compliance from an administrative perspective.”

10. Regulatory scrutiny

And 23% of respondents expect increased regulatory scrutiny to contribute to heightened exposure to employment and labor litigation over the next year.

EEOC

Take the EEOC for example. The agency currently has an increased budget, more resources, and more intentionality, Mensah pointed out.

Ultimately, companies can expect to see more requests for info and more time dedicated to investigation – and fewer instances of people filing charges, and then simply getting a right-to-sue letter, Mensah said.

Notably, the agency’s 2022-2026 strategic plan targets specific issues, such as systemic discrimination, pay equity and other issues. In these areas, the agency is more likely to get involved.

NLRB

Similarly, the NLRB comes into play. Recently, we’ve seen an increase in buzz around union activity. The Hollywood strike was a high-profile employment dispute that got a lot of media coverage.

Since then, there’s been an increase in the number of people who are filing unfair labor practice charges with the NLRB, Mensah said, perhaps in part because people are learning that they don’t have to be in a unionized workforce to do that.

In Mensah’s view, the NLRB has done a good job of spreading that message, and people are becoming more keyed in to the NLRB as an option to resolve their disputes.

FTC

In another example, the Federal Trade Commission’s proposed rule to ban noncompete agreements is expected to become final in April.

“But legal challenges are already teed up to slow it down,” Mensah said. “So whether or not it ultimately goes into effect right away or ever remains to be seen.”

One of the strongest legal challenges, according to Mensah, is whether the FTC has the authority to enact this ban, so if that challenge wins, then we may not see a ban take effect. That remains to be seen – and is certainly something to watch.

Majority of companies want to settle out of court

When it comes to employment law mistakes, HR pros know the cost of noncompliance can be quite steep.

So it’s not surprising that a clear majority of respondents said their companies wanted to avoid the expense of going to court. In fact, 88% reported that settling disputes before trial is either:

• Important (54%), or
• Very Important (34%).