The Legal Landscape Is Undergoing Dramatic Shifts
Changing labor and employment laws will challenge HR professionals through the end of this year and beyond. HR professionals responsible for associates in several states will have to be particularly vigilant in their effort to maintain HR compliance and mitigate risk.
The good news is, doing so will also make your company more attractive to top job seekers because the best candidates tend to appreciate transparency, fair and equitable treatment, and a strong reputation for integrity.
Surveying potential 2024 employment law changes, three areas in particular stand out as being areas HR and talent acquisition teams need to focus on immediately. They cover wage transparency, diversity in recruitment, and the non-compete clause ban.
1. Proposed and Actual Pay Transparency Laws
The Pay Transparency Act is a proposed federal bill that would amend the Fair Labor Standards Act to require “an employer providing an employment opportunity to disclose the wage range for such employment opportunity to employees and applicants for employment, and for other purposes.”
Specifically, the Act would require companies to republish job descriptions to accurately show salaries for every position posted. The intention is to promote fairness and equity by eliminating pay inequities related to race and gender.
The proposed salary transparency law reflects a burgeoning movement that has seen at least 11 states and a handful of cities and counties pass pay transparency laws, with more considering similar legislation.
This will affect recruitment opportunities as more candidates recognize this movement and look for positions with pay transparency.
How This Impacts HR Professionals
HR professionals will have to stay on top of changes occurring at federal, state and local levels.
If the proposed federal bill becomes law, all job descriptions would need to be updated to include salaries, and salaries should be included with every position posted in states or localities already impacted by such legislation.
Meanwhile, HR professionals can stay a step ahead by reviewing all internal compensation ranges to make sure they are equitable and have no large pay discrepancies. HR professionals should also create and share a career mobility program so employees can see and explore paths toward compensation growth.
2. The FTC Bans Non-compete Clauses
The Federal Trade Commission (FTC) nationwide ban on noncompetes, which was to have gone into effect Sept. 4, 2024, is now on hold. In August, a federal judge in Texas blocked the FTC rule which would have made most noncompetes unenforceable.
Noncompetes impose contractual conditions that prevent workers from leaving an employer and taking a new job with a competitor within a defined geographic area or time. Currently, nearly 1 in 5 American workers — about 18% — are bound by a noncompete clause, limiting their ability to pursue better employment opportunities.
The Texas lawsuit was filed by the U.S. Chamber of Commerce and other plaintiffs, who argued that the FTC was overstepping its authority.
The ban would have changed the recruitment and retention process for employers, while proponents argued it would create an environment more conducive to worker mobility, with employees having more opportunities for better positions.
The ultimate outcome remains unsettled. The FTC is considering appealing the Texas court’s decision. With strong interests on both sides of the issue, the U.S. Supreme Court may end up having final say. Meanwhile, HR professionals will have to stay tuned for further developments.
How This Impacts HR Professionals
For the time being, it does not. However, if the FTC rule goes into effect, HR professionals and legal departments will have to collaborate to revise contracts that contain any unlawful noncompete provisions. If that time comes, HR departments should identify — and be prepared to notify — current and former employees impacted by the law. They should also identify and inform any employee who falls under the ruling’s “senior executive” exception, which would apply to less than 0.75% of workers.
While the FTC decision would not explicitly ban non-solicitation or non-disclosure agreements, HR and legal would have to review these too to make sure they do not, practically speaking, have the same effect.
3. The Affirmative Action Ruling and Changing DEI&B Laws
The 2023 U.S. Supreme Court ruling rolling back affirmative action at universities is having a domino effect beyond the ivy-covered walls of higher education.
In addition, scores of bills restricting or regulating diversity, equity, inclusion and belonging (DEI&B) initiatives have been introduced in over 30 states.
Making matters more challenging, pressure from shareholders and legal challenges from special interest groups have led many companies to update or abandon their DEI&B policies.
How This Impacts HR Professionals
HR professionals at companies that are not reframing their DEI&B policies will continue to focus on diversity and inclusion in recruitment moving forward.
However, in doing so, they will have to review and potentially adjust their DEI&B initiatives and recruitment efforts to avoid compliance risks.
In companies that are distancing themselves from the DEI&B movement, HR professionals will find themselves focusing more on internal efforts, and less on external audiences and events. Examples of the latter include “social or cultural awareness parades, festivals or events.”
How a Talent Solutions Partner Can Help Navigate These Waters
As a result of the fluid landscape for labor and employment laws, maintaining compliance and mitigating risk will require vigilance in HR departments everywhere.
The talent pool will likely shift and become broader and deeper with more employees becoming free to advance their careers.
As new candidates become available, a talent solutions provider such as Aston Carter can help you find the best of the best — the top niche talent with the targeted experience you’re looking for.
At the same time, Aston Carter can also help you secure the specialized HR talent you need to meet the departmental challenges that are sure to accompany this shifting legal terrain. This includes but goes beyond the personnel you will need to revise job descriptions to include salaries and review your internal compensations to make sure they are equitable. We can also deliver the higher-level consultants you need to be assured of compliance in this increasingly complex environment.
Contact us today to help find the talent you need to navigate the dynamic HR landscape.
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