With the 2022 midterm elections finally over, employment law is poised to undergo some changes in 2023. Thanks to the narrowly divided Congress, these changes are much more likely to take place on the state and local levels than on the national level (but the U.S. Department of Labor and National Labor Relations Board are still likely to rattle some human resources cages this year). Here are four employment law changes that employers should be aware of during the coming year.
Paid Leave
The issue: Paid leave is a top priority for many state legislative bodies. The programs most legislators are considering are not employer funded or employer administered, but rather more of a form of unemployment-like program funding with a state agency handling eligibility and funding determinations.
How this affects HR: Imagine a situation in which an employee who needs time off to care for a sick family member submits notice to the employer under the Family and Medical Leave Act (FMLA) and simultaneously applies for paid leave under the state’s program. Although the employer is responsible for handling all the FMLA determinations, the state determines what amount the employee will receive and handles all payments. This reduces the financial and administrative burden on the employer and (more particularly) on HR, which simply has to provide a website or phone number for the employee to contact. This program is already on the books in several states (such as California, Connecticut, Massachusetts, and Oregon), and other states (such as Michigan and Minnesota) may adopt it soon.
On the federal level: Don’t expect any form of paid leave to pass the House and Senate. Although a handful of Republican representatives voted in 2022 to give rail workers seven sick days to prevent a countrywide strike, it is highly unlikely that any form of paid leave—including sick leave—will pass the current Congress.
Labor Law
The issue: Every HR professional should have their sights on the National Labor Relations Board (NLRB) in 2023, even if their workforce is not unionized. With 71 percent of Americans favoring labor unions; large unionizing national campaigns with Amazon, Apple, and Starbucks; and an active General Counsel urging the expansion of worker rights, labor law is squarely in the spotlight. The NLRB has already signaled changes to the joint-employer rule, expansion of union recognition, and the potential to extend rights to nonunion workers to have a representative present during investigative interviews that could lead to discipline.
How this affects HR: The NLRB applies not only to unionized workplaces but to every workplace.
Noteworthy: The NLRB’s General Counsel is concerned about the level of surveillance employers are undertaking, especially during remote work. Surveillance that could capture employees engaging in unionizing activity or other concerted protected communications could run afoul of the National Labor Relations Act, drawing the ire of the NLRB.
Overtime
This issue: The Department of Labor (DOL) has announced that one of its top priorities is to increase the number of employees eligible for overtime. Over the summer of 2022, the department held listening sessions with stakeholders in an effort to form a strategy around overtime. Although the DOL’s original target of October 2022 for an announcement about its proposed changes passed without any proposed regulation changes issued, this does not mean that the department won’t take action eventually.
How this affects HR: The DOL has limited options to increase overtime eligibility. Its most likely option for increasing the number of employees earning overtime is to raise the salary threshold from $684 per week to a higher number. (This is similar to what the Trump administration’s DOL did in 2019 but is not close to the number the Obama administration had sought in 2016.) Making this change would not be too burdensome on HR departments but would require some work to implement and communicate across positions.
Noteworthy: The DOL’s second-most likely option to increase overtime eligibility is to dramatically change the duties tests used to determine if a position is exempt from overtime. It’s unlikely that the department will choose this option, though, because it would create chaos in HR departments across the country as everyone reevaluated their positions.
Salary Transparency
The issue: A handful of states have already required employers to post the salary range of positions in their job announcements. The National Labor Relations Act already prohibits an employer from disciplining employees for discussing their salaries.
How this affects HR: Although some commentators consider the posting of salary ranges to be a company’s death knell, many employers see salary transparency as a good thing attracting more applicants. Regardless of how individual organizations feel about it, though, this requirement is coming.
Noteworthy: Because pay equity remains a problem, federal agencies such as the Equal Employment Opportunity Commission (EEOC), the Department of Labor, and the Office of Contract Compliance Programs (OFCCP) are likely to take this issue seriously.
Employment law changes never really slow down, and 2023 promises to bring many new developments! It is never easy to stay 100 percent compliant 100 percent of the time. However, companies that sign up for newsletters and alerts from legislative committees and watch the trends in states such as New York and California (and review their own policies through those lenses) are more likely to be prepared for new programs and legislation.
