2023 Employment Laws: What Employers Need to Know

2023 Compliance Cartoon: Ready for another year of compliance?

With the 2022 midterm elections finally over, employment law is poised to make some changes in 2023. However, these changes are much more likely on the state or local level than in the narrowly divided Congress. But don’t worry, the U.S. Department of Labor and National Labor Relations Board will rattle some human resources cages this year. Here are four employment law changes you should know.

4 Employment Law Changes to Know Heading Into 2023  

1. Paid Leave

The issue: Paid leave is a top priority for many state legislative bodies. The programs most legislators are considering are not employer funded or employer administered, but rather a more unemployment-like program funding with a state agency handling eligibility and funding determinations.

How it affects HR: Imagine, an employee has a sick mother and needs time off to care for her. The employee submits notice to the employer under the Family and Medical Leave Act while simultaneously applying for paid leave under the state’s program. While the employer is responsible for handling all the FMLA determinations, the state will determine what amount the employee will receive and handle all payments. This reduces the financial and administrative burden on the employer and more particularly, on HR. HR will simply have to provide a website or phone number for the employee to contact. Already on the books in states like California, Connecticut, and Massachusetts and starting soon in Oregon, states like Michigan and Minnesota may make this change.

On the federal level: Don’t expect any form of paid leave to pass the House and Senate. While a handful of Republican representatives voted for seven sick days for rail workers to avoid a countrywide strike, it is highly unlikely any form of paid leave, including sick leave, will pass this Congress.

2. Labor Law

The issue: Every HR professional should have their sights on the National Labor Relations Board (NLRB) in 2023, even if their workforce is not unionized. With 71 percent of Americans favoring labor unions, large unionizing national campaigns with Amazon, Apple, and Starbucks, and an active General Counsel urging the expansion of worker rights, labor law is squarely in the spotlight. The NLRB has already signaled changes to the joint-employer rule, expansion of union recognition, and the potential to extend rights to nonunion workers to have a representative present during investigative interviews that could lead to discipline.

How it affects HR: Remember, the NLRB does not just apply to unionized workplaces. It applies to every workplace.

Noteworthy: The NLRB’s General Counsel is concerned about the level of surveillance employers are undertaking, especially during remote work. Surveillance that could capture employees engaging in unionizing activity or other concerted protected communications could run afoul of the National Labor Relations Act, drawing the ire of the Board.

3. Overtime

This issue: The Department of Labor has previously announced that increasing the number of employees eligible for overtime is a top priority. Over the summer of 2022, the Department held listening sessions with stakeholders in an effort to form a strategy around overtime. Originally, the Department intended to make an announcement in October about its proposed changes, yet October came and went before any proposed regulation changes were issued. This does not mean that the Department is not going to take action.

How it affects HR: The Department has limited options to increase overtime eligibility. The most likely option the Department has to increase the number of employees earning overtime would be to raise the salary threshold from $684 a week to a higher number. This is similar to what the Trump Administration Department of Labor did in 2019 but was not close to the number the Obama Administration had sought in 2016. Making this change would not be too burdensome on human resources departments but would require some work to implement and communicate across positions.

Noteworthy: The second option would be to dramatically change the duties tests used to determine if a position is exempt from overtime. It’s unlikely the Department would choose this option as it would create chaos in human resources departments across the country as everyone re-evaluated positions.

4. Salary Transparency

The issue: A handful of states have already required employers to post the salary range of positions in their job announcements. The National Labor Relations Act already prohibits an employer from disciplining employees for discussing their salaries.

How it affects HR: While some commentators consider the posting of salary ranges to be a death keel, many employers see salary transparency as a good thing attracting more applicants. Regardless of individual feelings, this requirement is coming.

Noteworthy: Because pay equity remains a problem, expect federal agencies, like the Equal Employment Opportunity Commission (EEOC), the Department of Labor, and the Office of Contract Compliance Programs (OFCCP) to take this issue seriously.

Employment laws: The takeaway

It is never easy to stay 100 percent compliant 100 percent of the time. Signing up for newsletters and alerts from legislative committees and watching the trends in states such as New York and California (and reviewing your polices through those lenses) can all help your organization be ready.

But keep in mind, employment law changes never really slow down. 2023 promises to be no different! Read more in the 2023 employment law review.