HR Compliance made headlines last year and caused some companies to run off the road. A wave of pay equity laws swept across the country, and significant company layoffs brought oft-forgotten regulations into top Google searches. Be aware of these road signs as you prepare your compliance map for 2023.
Caution! Speed bumps ahead.
Overtime - Fair Labor Standards Act (FLSA): The US Department of Labor (DOL) planned to release new overtime rules in October 2022. However, that date came and went with the Wage and Hour Division still heads-down in feedback and formulas and inflation rising. When the proposal is released, we expect a significant increase in the salary threshold for exempt employees, making more workers eligible for overtime pay and possible changes to the duties test.
Minimum Wage - Fair Labor Standards Act (FLSA): The minimum wage rate for federal contractors increased on January 1, 2023, for both standard and tipped employees. The general federal minimum wage has not increased since 2009, so the contractor rate change could indicate an upcoming move to address the general rate.
Straight Ahead Only - Pay Transparency
California SB 1162: California employers with 15+ employees must disclose pay ranges in job postings. Employers with 100 or more employees and/or 100 labor contractors and at least 1 of those employees in California must report on pay data. This includes identifying the mean and median pay data for combinations of gender and race/ethnicity. Take note: The reports must be submitted even if you are not required to send EEO-1 reports to the Equal Employment Opportunity Commission.
New York: New York City enacted the requirement of salary disclosure on job postings for employers with 4+ employees, at least 1 of whom is in NYC. A statewide bill requiring disclosure of compensation or range of compensation to applicants and employees is awaiting the governor’s response.
Not only are states requiring salary disclosure, applicants expect it. Even if you are not affected by one of these laws, your job posting sits alongside those that are. Indeed’s research found that 75% of job seekers are more likely to apply if the salary range is posted. Providing straightforward salary information will be better for the business.
WARN (Worker Adjustment and Retraining Notification) Act- The WARN Act has been on the books since 1988 and received recent press during the layoffs in late 2022. Its purpose is to provide workers sufficient time to prepare for the transition between their current and new jobs.
If you plan to do layoffs, plant closings, or significant hour reductions, you must review the WARN Act carefully. It includes multiple formulas to determine if WARN applies and to whom. Generally, private employers with 100+ workers laying off or reducing hours of at least 50 people at a single site must provide written notice at least 60 calendar days before covered plant closings and mass layoffs.
What about remote workers? For WARN purposes, they are considered part of the “home base” site - the location from which they receive assignments or to which they report.
In addition to the federal WARN Act, several states have mini-WARN Acts that reinforce the national standards on a local level, but some (currently, California, Illinois, Maryland, New Jersey, and Tennessee) have additional provisions.
Workers Ahead - Artificial Intelligence (AI) - AI can be found in almost every area of HR tech and affects most workers today. These tools run through applicant resumes at lightning speed and identify high-potential employees from the vast workforce, saving HR teams time and improving accuracy. However, concerns persist that these tools may result in biased decision-making. Federal, state, and local governments are taking action to remind employers that these systems are dealing with actual workers.
Federal AI Training Act - Requires federal government employees to complete training on AI topics to reduce the risk that it will be misused by the federal government. The training hasn’t been developed yet, and could take the full year allotted to create.
White House Blueprint for an AI Bill of Rights - While White House guidance isn’t law, it’s an indicator of the current administration’s intentions, so definitely worth noting. This document outlines how AI systems should be designed and used while protecting American citizens’ rights. While not specifically directed to employment, the principles apply to and include HR tech.
Equal Employment Opportunity Commission Guidance - EEOC guidance isn’t law either, but it indicates the direction of the agency’s position and may be referenced in complaints. The Commission addresses how AI might interact with the Americans with Disabilities Acts, the rights of workers with disabilities, and how companies can avoid illegal discrimination when using these tools.
New York City Local Law 144 of 2021 - The New York City Consumer and Worker Protection Agency regulated the use of “automated employment decision tools.” A company’s tool must pass a “bias audit” to confirm it does not cause a disparate impact on employment decision before its use. While the law went into effect on January 1, 2023, the agency announced it will not be enforced until April due to continued public comments.
Winding Road Ahead - COVID Leave - While most COVID-related regulations have disappeared, some state and local governments extended them, while others offer more flexibility for 2023.
New York State Assembly Bill A9513: New York extended the COVID-19 specific paid leave for up to 4 hours for all employees in the state to receive COVID-19 vaccinations.
California Assembly Bill AB-2693: California amended requirements to allow employers to post a notice of potential COVID-19 exposure at the worksite (and on existing employee portals) instead of providing written notice.
Plan Your Route
The key to compliance is consistency, which requires planning. For upcoming potential changes, begin working through options and decide how to proceed in preparation for the announcements. Be aware of the regulations that impact business decisions and consider them from the start.
Want to be really radical? Move forward before the government announcement because it’s the right thing to do. This approach will increase employee engagement and eliminate the rush to comply, allowing you to control the pace and plan.