When reflecting on the compliance trends employers must consider in 2023, the ever-increasing patchwork of state and local laws overshadows federal developments, according to King & Spalding Partner Amanda A. Sonneborn.
“There are some federal things to look out for,” she said. “But really, it’s about the state level, which makes things pretty complicated for employers.”
Employers have had to keep up with updates, revisions and changes to existing federal law dispensed by the agencies, of course. But it’s been some time since the federal government enacted a dramatically different employment law, Sonneborn said. “The reality for employers is that most of the changes are happening at the state and local level,” she said. “Assessing how you deal with it on a local versus federal model is the biggest challenge.”
In speaking with Sonneborn and two other attorneys, HR Dive identified five compliance trends for employers to watch in 2023.
#1: Pay transparency
“Pay transparency laws seem to be the way of the future,” according to Kelly Cardin, shareholder at Ogletree Deakins. The laws, which generally require employers to include salary range information in job postings, have cropped up most recently in California, Washington and New York City.
“These laws are unique in that they seek to correct pay gaps and inequities on the front end by informing candidates what an employer is willing to pay for a position,” Cardin told HR Dive in an email. “The idea is that by informing candidates of the pay range, systemic pay disparities are less likely to be carried forward.”
As more pay transparency laws appear, it’s likely the new requirements will translate to new expectations among candidates, Cardin said. So even where pay transparency laws aren’t in effect, job seekers may push the change forward.
#2: Employee privacy
The enactment of the California Privacy Rights Act brought employee privacy to the forefront in the U.S., Sonneborn told HR Dive in an interview. The law, which went into effect Jan. 1, follows the Illinois Biometric Information Privacy Act, which was enacted in 2008. But the California law encompasses much more than its midwest counterpart. The Illinois law sets forth rules about collecting, retaining and disclosing biometric identifiers and biometric information. The California mandate “governs all aspects of the employment relationship and how the data is used in context of that relationship,” Sonneborn said.
“It’s just dramatically different from what employers have traditionally had to do,” Sonneborn said. Because the law went into effect in California, employers with job applicants or employees there will have to consider how they plan to handle compliance, and whether their privacy policies will apply country-wide.
Employers will continue to see movement on paid leave from a state and local level, Sonneborn said. Illinois, for instance, passed the Paid Leave for All Workers Act Jan. 10. Once the law takes effect next year, employers must annually provide covered employees up to 40 hours of paid leave, which can be used “for any purpose.”
Even as broad, progressive leave laws like this one start to take effect, Sonneborn doubts employers will see anything leave-related come out of Washington, D.C. “I think there will be various states that continue to move on certain parts of leave. And that will make it harder for employers to comply,” she said.
Because there’s no consistent approach to leave across all 50 states, employers are left to decide how they’ll comply with differing requirements, and whether they’ll provide consistent benefits to employees in different pockets of the country.
There are some topics to watch on the federal level, of course. Sonneborn recommended paying attention to the labor decisions from the Biden administration.
She also noted a change within labor itself. The more labor-friendly administration is coupled with “what I would call a proliferation of union organizing techniques,” she said. “We’re seeing unions in the tech sector and the food and beverage sector organize in ways they haven’t in the past.”
Another federal issue to watch: the Federal Trade Commission’s proposed rule to ban noncompete agreements. “The FTC’s ban on non-competes reflects a sharp reversal of the cooperation between federal and state authorities that has marked antitrust enforcement for decades,” Proskauer Partner Colin Kass told HR Dive in an email.
“If the FTC is successful in enforcing its ban on non-competes, it will fundamentally change the relationship between employee and employer. Until now, the protection of trade secrets and know-how justified limited non-competes,” he said. But if that justification fades, companies will have to rely on other means to protect sensitive information — means that will likely be less effective and more expensive, Kass noted.
But the rule is unlikely to be adopted as is, Kass said. “However, it’s not the only tool in the FTC’s toolbox and they appear to have an agenda for antitrust.”