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Workplace regulations span the gamut of priorities — discrimination, hiring and onboarding procedures, labor standards, workplace safety, employee benefits, employee data and privacy — and they are meant to protect the interests of all stakeholders equally.
However, because the business and social environments are changing so rapidly, the laws governing them remain in a state of constant evolution. And now, with AI in the mix, we can expect to see a whole new field of laws at the intersection of technology and employment.
Here are the new regulations and legal updates for HR to stay ahead of in 2024.
Employment of Remote or Gig Workers
The Department of Labor (DOL) has finalized an update to the rule defining independent contractor status.
The new rule, which was published on January 9 and takes effect on March 11, 2024, establishes a six-factor federal test defining independent contractor status, which focuses on “economic dependence” to determine whether workers are truly entrepreneurial (contractors) or economically dependent on an employer (employees), Peter Rahbar, employment attorney, workplace issues expert and founder of The Rahbar Group, explained.
No one factor of the six is of greater weight than the others, and a court or the DOL can determine the weight to place on each factor in making that determination. They can also choose to consider other factors in making this determination of economic dependence.
Rahbar’s opinion is that the DOL’s statements and intent make it clear that it is seeking greater power in enforcement against unlawful independent contractor relationships.
“Employers should immediately analyze their independent contractor relationships,” he said. “There should be no doubt that the scope and flexibility of this rule gives the DOL a broader foundation for enforcement against employers.”
The Use of AI in Recruitment and Talent Management
Illinois and Maryland are among a number of states that have enacted laws governing the use of AI and automation tools in hiring and onboarding; with some dating back to as early as 2020. New York joined the group in 2023.
The laws are primarily around informed consent for the use of AI tools in the hiring process, the use of facial recognition in interviews and making the results of bias audits public, if AI is in use.
As of January 1, 2024, 31 states have introduced bills related to AI, said Angela Preston, associate general counsel, corporate ethics and compliance at background and identity solutions firm Sterling.
The bills, she said, often guard against the use of AI which could result in discrimination in the workplace. They tend to put the burden of conducting impact assessments and bias testing to prevent discriminatory automated decisioning on employers. These are skills and capacities HR should start planning for.
While there is still no comprehensive federal legislation specifically regulating the use of AI in recruitment as we enter 2024, Rahbar cautions that the US’s Equal Employment Opportunity Commission (EEOC) and other agencies have stated that existing laws such as Title VII do apply to the use of AI tools. These agencies will continue to evaluate the use of AI tools in hiring, the impact on compliance with the Americans with Disabilities Act and other employment-related situations, so HR should be prepared.
Related Article: What You Should Know About Upcoming AI and Automated Employment Tool Rules
DEI/ Workplace Discrimination Laws
The Pregnant Workers Fairness Act (PWFA) that took effect in June 2023 requires employers to provide reasonable accommodations to job applicants and employees with a “known limitation” due to pregnancy, childbirth or related medical conditions, unless the accommodation will cause the employer a “significant hardship.”
The final rules from the EEOC defining what types of accommodations are “reasonable,” as well as employer obligations to engage in an “interactive process” with employees requesting accommodations, are still awaited, Rahbar added.
In the meantime, however, Preston recommends HR tracks two additional laws in this area. The first is the “Fair Chance Laws,” which typically limit the use of criminal information in hiring and impose additional notice requirements for employers to provide better opportunities for individuals who have previously been convicted of crimes.
The other is the “Clean Slate Laws,” similar to Fair Chance laws, aimed at wiping the slate clean for formerly convicted individuals to offer them a fresh start in the workplace. These laws, enacted on a state-by-state or local level, require courts to remove records from the public domain and, in some cases, limit information that is available to employers.
Related Article: When AI Discriminates, Who's to Blame?
Labor Law Changes and Amendments of Note
A new National Labor Relations Board (NLRB) rule defining “joint employer” liability will take effect on February 26, 2024. The final rule under the National Labor Relations Act (NLRA) establishes “a new standard for determining whether two employers, as defined in the Act, are joint employers of particular employees within the meaning of the Act.”
Two or more employers will be held to be joint employers if they share or co-determine (possess the authority to control, directly, indirectly, or both) matters governing their employees’ essential terms and conditions of employment, even if that authority is not exercised. As per Rahbar, the rule clarifies who controls the “essential terms and conditions” of an employee’s employment and sets forth a definition of the “essential terms and conditions.”
These changes will likely lead to an increase in rulings finding “joint employer” status. The law will especially impact companies that work in partnerships or franchises, or those that rely on contracted services, such as staffing agencies.
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Related Article: What to Do When Compliance Is Wrong
Proposed Prohibition of Non-Compete Contracts
In January 2023, the FTC proposed a rule banning all non-compete agreements, calling the use of noncompete clauses “an unfair method of competition” which hurts both employees, who cannot pursue all opportunities available to them, and employers, who cannot hire workers bound by these contracts.
After an extended comment period, the FTC has not yet announced its final rule regarding non-competes. Many expect this decision to come in the first quarter of 2024, and if enacted, the law will likely face immediate legal challenges from business and corporate advocacy groups, said Rahbar.
These groups have already stated their intention to challenge the FTC’s jurisdiction in enacting any rule regulating non-competes. If a final rule is published in the Federal Register, companies will have 180 days to comply.
Minimum Salary Requirements for Exempt Status
In August 2023, the Department of Labor proposed increasing the minimum salary levels required for a position to be exempt from minimum wage and overtime pay requirements (using the Executive, Administrative or Professional exemptions) from $684/week to $1,059/week.
The DOL estimates that the rule would restore and extend overtime protections to 3.6 million salaried workers and guarantee overtime pay for most salaried workers earning less than $1,059 per week, or about $55,000 per year.
In addition, said Rahbar, there is a proposed increase to the highly compensated employee exemption from $107,432 to $143,988. Business and corporate advocacy groups have fought hard against such increases in past years, but the DOL has stated an intention to act on this rule by April 2024.
Related Article: NYC's New AI Bias Law Is in Effect. Here's What it Entails
Employee Data Privacy
While the GDPR requires EU-based employers to provide employees with a legal basis for the collection and processing of their personal data, the United States has not yet put in place a nationwide regulation around employee data privacy. California’s CPRA is the most comprehensive so far, though many states are adopting some version of the provisions.
States have their own versions of employee data privacy laws, and while many of the core principles are similar or common, it is imperative to stay on top of all the relevant state laws as applicable to the company.
Several sector-specific regulations also govern data-sensitive industries, such as health or credit information, financial institutions, marketing, and telecommunications, so HR should look into which laws apply to their business.
Related Article: Workplace Monitoring and Employee Data Privacy Are on a Collision Course
Tracking Changes, Updating Capabilities
It’s clear that aside from compliance with laws, HR’s challenge is to keep track of the evolving rules and developing regulations across a swathe of areas, while proactively putting in place new capabilities that may be needed to address these new or anticipated laws.
Preston recommends that in addition to keeping up with planned updates by the DOL and states in areas like wage and overtime, HR actively tracks the EEOC's enforcement efforts in protecting against discrimination, which includes scrutiny of artificial intelligence.
Three other areas seeing some momentum are: updates to Form I-9, the new alternative procedures for E-Verify that were released at the end of 2023, and the legalized medical and recreational use of marijuana, where new laws on the acceptable use of marijuana by workers may impact screening practices or require policy updates.
While periodic and frequent reviews of policies, training materials and processes are a must, HR must also engage legal counsel, the compliance department, information technology and other relevant stakeholders to ensure the organization is protected and employees are provided with the best possible experience, Preston concluded.
