In collaboration with our partners at Outside GC (OCG), Sarah Lieberman, Partner and Chief Human Resource Officer with TCRH and OGC Partner Sarah Biran, explore what lies ahead for employers in the new year.
For many businesses, the start of a new year is a time for setting goals, launching new initiatives and fine tuning processes as needed. For employers, particularly those with employees across multiple states, this includes reviewing recent developments in the law and mapping out a compliance plan in line with new requirements. To that end, below are five areas that employers may wish to focus on as we begin 2024:
Handbook and Policy Updates
Employers across the country will see big changes in 2024, including expanded paid sick leave laws in California and Illinois, added protections for off-duty cannabis use in Washington and California, and expanded eligibility for leaves of absence in Oregon. New legal requirements such as these should be reflected in handbooks and related policies to ensure compliance.
Another reason for prioritizing the review and update of handbooks relates to the National Labor Relations Board’s (NLRB) August 2023 decision in Stericycle, which made clear that employer policies must not dissuade employees from discussing the terms and conditions of their employment, including wages or other employer policies. Importantly, in light of the NLRB’s position that, if challenged, individual policies will be reviewed on a case-by-case basis, employers can neither assume the legality of certain categories of policies nor expect that broad disclaimers will insulate their policies. Employers are therefore encouraged to update their policies, especially those relating to social media use, disruptive or inappropriate conduct (both on and off duty), and/or civility and courtesy, so that they appropriately reflect employees’ rights to discuss terms and conditions of employment.
Pay Transparency in Hiring
States continue to enact legislation imposing requirements on employers to provide compensation-related information during the hiring process, with the latest being New York and Hawaii. Navigating the patchwork of state laws and local ordinances is undoubtedly tricky, but nonetheless important. The Equal Employment Opportunity Commission’s (EEOC) latest Strategic Enforcement Plan, issued in September 2023, lists among its top priorities for the next five years both eliminating barriers in recruitment and hiring and advancing equal pay for all workers. Meanwhile, the trend toward transparency continues; in 2025, Illinois will require employers to include pay scale and benefits information in any job posting.
Although this issue impacts all employers, those with employees in multiple states, as well as employers seeking candidates from across the country for a remote position, should carefully review their job postings to ensure they provide the type(s) of information required by these various laws, such as salary range (or ranges, if there will be differing compensation depending on geography), job description, or a description of benefits and/or additional compensation (e.g., bonuses, stock options, or commissions).
Another on-going trend is the move against non-competition agreements. This year, Minnesota became the latest state to prohibit most non-competition agreements. In addition, California, which has a longstanding public policy making most non-competition agreements void, passed SB 699, establishing that non-compete agreements are void in California regardless of where the employee worked, when the agreement was entered, and/or where the agreement was signed. Also, beginning February 14, 2024, California will require employers to notify current and former employees whose contracts included an unlawful non-compete clause that such provision is void. Finally, although it was ultimately vetoed by the governor, New York’s state legislature passed a non-compete ban. Clearly, the trend against non-competes shows no sign of abating in 2024.
Fortunately, employers can still protect their business interests. Legislatures and courts agree that requirements protecting confidential information and trade secrets are valid, giving employers good reason to review their employment contracts and business protection agreements to (1) ensure that they do not include unlawful non-compete provisions and (2) confirm that they obligate employees to protect trade secrets or other business confidential information.
Changes in employee leave laws also continue to generate attention, as more states adopt employee leave requirements and others amend existing laws to enhance employee rights to leave. Likewise, with more companies employing workers across jurisdictions, the challenge to comply with leave requirements grows more complicated.
For example, beginning in 2024, California has increased the amount of paid sick leave employees are entitled to each year from 24 hours to 40 hours (or five days); and in Illinois, the Paid Leave for All Workers Act, which went into effect on January 1, 2024, will provide employees with up to 40 hours of paid leave for any reason during a 12-month period. Not to be outdone, Cook County and the City of Chicago also expanded their leave laws (Cook County effective December 31, 2023, with enforcement beginning February 1, 2024 and Chicago’s to be effective July 1, 2024), guaranteeing up to five days of paid time off and five days of sick time for all Chicago employees. And finally, beginning January 2024, Minnesota will require employers to provide employees up to 48 hours (or 6) days of paid sick leave each year.
Given this increasing complexity, employers with multi-state workforces should first review their existing leave policies vis-à-vis all applicable laws, and then decide upon the best approach forward: either a state-by-state approach with a system to administer and track leave or a single approach for all states that offers employees access to the most generous leave requirements. These decisions are critically important, as the resulting policies will impact not only the bottom line, but also a company’s culture and morale.
Return to Office Guidelines
In 2024, many employers will continue their efforts to bring employees back to a physical workplace in accordance with a full-time, onsite requirement or a prescribed hybrid approach. This effort will require careful planning and coordination, especially in situations where employees have spent the past three years working from home. Employers seeking to change workplace arrangements in 2024 are encouraged to review their existing policies and establish clear guidelines for both in-office and remote work, taking care to clarify employee eligibility and scheduling. Additionally, since remote work arrangements can be offered as a reasonable accommodation under the Americans with Disabilities Act (ADA), employers adopting return to office guidelines may see an increase in accommodation requests from employees who believe they qualify to remain remote. For this reason, designing an ADA interactive process that is easy to understand and accessible to employees is likely to be a valuable resource to employers.
Another factor to consider is EEOC compliance and the role that consistent employment practices and a fair, well-documented decision-making process can play in mitigating the risk of discrimination claims. Employers may wish to conduct a thorough review of all remote locations and the commuting distance to the closest physical office to ensure that return to office guidelines will not disproportionately burden certain employees. Balancing the needs of the organization with the needs of employees is critically important, especially when employee engagement and retention hangs in the balance.
By focusing on these issues now, your organization can check the box on employment compliance for the year ahead. We are happy to support your work in this area. OGC’s experienced employment attorneys can answer questions and provide counsel, and the team at The CEO’s Right Hand can supplement and support your HR needs. Contact us for more information: OGC and TCRH.