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Keep These Five Employment Law Issues on Your Radar this Year


As employers move into the new year, it is clear that 2023 will bring no shortage of change to the employment law landscape — as everything from the pandemic to tech advances bring new and increasingly complex legal dimensions into human resources' purview.

Houston-based Nandini Sane, an associate in labor and employment with Cozen O'Connor, offers five areas on which employers need to keep focused this year.

Expansion of pay transparency laws

One of the most significant legal trends affecting employers across the country has been the expansion of pay transparency laws, which generally require organizations to disclose prospective salary or salary ranges in job postings. Specific obligations and penalties for each of these laws vary by state and location, according to Sane.

Since the start of this year, California, Rhode Island and Washington have became the latest jurisdictions to enact pay transparency laws.

"This trend is likely to continue as other states and locations pass similar laws," Sane says. "Prior to posting any job, employers should closely review the postings and the applicable laws to ensure compliance."

Brandon Weber, CEO at Nava Benefits also recently told Human Resource Executive employers should consider being more transparent about the true value of their total rewards, not just salary.

"In most cases, you'll find that employees will give you credit for going beyond offering only medical and dental benefits," Weber says. "It's a great way to show them that you care about their wellbeing, and it also is helpful if you have to start operating in a more transparent salary scenario. Compensation clearly is not only about pay."

Increased scrutiny on non-competition agreements

On Jan. 5, the Federal Trade Commission (FTC) announced a proposed rule that would ban virtually all non-competition agreements in employment contracts (more). Sane says that given the wide use of these types of agreements across all industries, the implementation of this rule would have a monumental impact on the employment law landscape.

"While it is still too early to tell if the FTC's rule will ultimately go into effect, it does signal the increased scrutiny that restrictive covenants may face moving forward and suggests that more states may ban or limit the use of these types of agreements," she notes.

Artificial intelligence in the workplace

Sane singled out the growing number of employers that have been utilizing artificial intelligence technology to automate employee-management functions. These technologies, she says, which often use algorithms to track and analyze data, have wide-ranging applications and can assist employers with recruiting, hiring, tracking productivity and improving efficiencies. Their impact and adoption is drawing more regulatory attention.

"Given the rise of this technology, the EEOC and the NLRB have recently issued guidance on using these types of tools and the potential legal implications they pose," she notes, adding that states such as New York, Illinois and Maryland have enacted regulations relating to the use of AI in the workplace. "As the use of artificial intelligence increases, it is expected that more laws will be passed to address the use of this technology in the workplace."

Expanded anti-discrimination measures

Another trend Sane says employers should be aware of is legislation that protects against racial discrimination based on hairstyle, as a number of state and local governments have passed versions of the CROWN Act, which expressly recognize hairstyle discrimination as race-based (more). "Last year, the U.S. House of Representatives passed a federal CROWN Act, and it is possible that a federal law could be passed sometime this year that would be incorporated into Title VII [of the Civil Rights Act of 1964] for enforcement," Sane says.

New DOL standard for independent contractors

Finally, it is expected that the U.S. Department of Labor (DOL) will issue a new test this year to evaluate whether a worker is an employee or an independent contractor. "This new rule is expected to rescind the DOL's prior rule, passed in 2021, and would effectively result in more workers being classified as employees rather than independent contractors," Sane says.

Mark Wallin, a partner in Barnes & Thornburg's Chicago office, recently wrote for Human Resource Executive that businesses using independent contractors need to "get ahead" of the final rule now and adapt their policies to the six-factor rule the DOL is recommending to determine contractor status.

"Given that the DOL has indicated this is an area of focus and the fact that a new rule may spur a wave of collective action litigation," he says, "considering taking a proactive approach is prudent."

Posted In: Artificial Intelligence (AI); Congressional Activity; Department of Labor (DOL); Equal Employment Opportunity Commission (EEOC); Hiring/Recruiting; Illinois; National Labor Relations Board (NLRB); Non-Compete Clause (Restrictive Covenant), Non-Disclosure Agreement (NDA); Title VII of the Civil Rights Act of 1964 (Title VII)

Want to know more? Read the full article by at Human Resource Executive Online

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