Reflecting Upon and Looking Forward to Labor and Employment Law Changes

Now that we are firmly into fourth quarter, it is a good time to reflect on the legal changes that became effective this year and to look ahead to those coming in 2024. This past year saw significant changes around employment agreements and employee handbooks, as well as a surge of state laws prohibiting workplace discrimination and protecting employee leave time. Looking forward, these trends are continuing as states adopt new laws that affect all aspects of employment. Employers should consider reviewing their applications, interview guides, employment agreements, and employee policies and handbooks to make sure they are in compliance as we approach the New Year.

The Year 2023 in Review

The labor and employment law landscape saw a whirlwind of changes in the year 2023. As a brief recap, developments have included the following.

• The National Labor Relations Board (“Board”) issued its McLaren Macomb decision, as we reported on here. The Board has taken the position that several standard, run-of-the-mill provisions in separation agreements are unlawful under the National Labor Relations Act (“NLRA”).
• As we reported on here, employment agreements including fair competition and arbitration agreements are under attack as well. These attacks are coming from the General Counsel for the National Labor Relations Board (“GC”), the Federal Trade Commission (“FTC”), and state legislatures.
• The Board’s Stericycle, Inc. decision drastically changed the standard for determining when employee handbook rules violate the NLRA. Now, typical provisions such as conduct, professionalism, and anti-harassment rules can be found to violate the NLRA unless they are narrowly tailored. For more information, read our relevant client alert here.
• New workplace protections for pregnant and nursing employees became effective, as discussed here.
• On the state level, equal employment opportunities and anti-discrimination laws were updated, including the passage of versions of the CROWN Act (like the one discussed here) which were adopted in Arkansas, Michigan, Minnesota, and Texas.
• Pay transparency laws continued in popularity and became effective in California, Illinois, New York, Rhode Island, Virginia, and Washington, as reported on here.
• States also continued to pass paid leave laws, including family and medical leave in Delaware, Maine, and Maryland, and paid sick leave laws in Colorado and Minnesota.

Looking Forward to the Year 2024

Expected Federal Law Changes

Federal regulators are aiming to shake up things up next year as well. Employers should know that the FTC has proposed a complete ban on the use of non-compete agreements with employees. First proposed in January 2023, the FTC has indicated that it plans to vote on a final version of this rule in April 2024. If adopted, this would drastically change employers’ options for protecting its company from unfair competition. In addition, while the Board articulated a new rule for evaluating whether a worker is an independent contractor or an employee in 2023, the U.S. Department of Labor (“DOL”) is expected to issue its own rule in the near future. It is anticipated that the new test will make it harder for companies to use independent contractors. While these changes have not yet become effective, employers utilizing non-compete agreements and independent contractors will want to follow these developments closely.

Upcoming State Leave Law Changes

Following the lead of Maine and Nevada, Illinois will become the third state to mandate that employers provide employees with paid “any time leave.” Illinois’ new leave policy mandates that employers provide employees with at least 40 hours of paid leave a year that they may take for any reason. Also, employers with employees in Colorado and Minnesota will be subject to new paid sick leave laws. Notice to employees is required under each of these laws and it will be important for employers to not only change their policies, but communicate the changes to employees. The easiest way to do so is often by including the policy in the employee handbook, so employers will want to review and update handbooks as needed.

State Equal Employment Opportunity Changes

Following the trend, pay disclosure laws and salary ban laws will become effective in Hawaii and Oregon. When posting job advertisements for locations in these states or which could be filled by employees working in those states, it will be important that pay range is posted on the job posting and comports with the new laws’ requirements. Additionally, employers in these states will be prohibited from asking applicants about their wage histories.

Also, next year, employment discrimination laws protecting the off-duty use of marijuana will become effective in California and Washington. Importantly, these laws do not prohibit employers from maintaining drug-free workplaces. Employers will continue to be able to prohibit possession, on-the-job impairment, and the use of marijuana on the job. Testing will need to focus on the employee’s current impairment rather than the presence of tetrahydrocannabinol in the employee’s system, however. Employers may need to adjust their pre-employment screening practices and policies as well as their drug-free workplace and impairment testing policies.

Finally, joining the states of California, Connecticut, Minnesota, and Pennsylvania, Colorado’s new employment discrimination law will prohibit employers from asking applicants about their age or any indicators of age, effective July 1, 2024. Indicators of age can include items such as dates of attendance and graduation years from educational institutions. Employers will want to review their applications and interview guides to make sure they are not running afoul of this new law.

Employer Considerations

Every aspect of the employment relationship is implicated by this and next year’s changes. Where relevant, employers will want to review their independent contractor classifications, employment agreements, fair competition agreements, and severance agreements. Additionally, it is likely that many companies are maintaining unlawful employee handbook rules that can lead to costly litigation. More narrowly tailoring your agreements and rules can help insulate your business from risk of liability. Also, employers will want to review whether changes to their job postings, applications, and interview guides are necessary to adapt to the recent and upcoming changes. Finally, equal employment opportunity and leave policies should not be overlooked.

If you need assistance in reviewing and revising your agreements, policies, procedures, and handbooks, please feel free to contact a Honigman Labor and Employment Attorney here.