New Regulations Reshape Employment Decisions 

Right out of the gate, 2024 could signal a transformative year for employment law as several new Federal and state laws will impact workplace policies and the hiring market. According to the National Law Review, there are several proposed rules and guidance issued by the Department of Labor (SOL), the United States Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and the Occupational Safety and Health Administration (OSHA), that will be or may be enacted in 2024. These rules may affect your organization at one or more locations. 

Here are a few standouts among several laws or amendments:  

Non-compete agreements – According to GovDocs, previously New York state passed legislation that prohibits non-compete agreements, which was then vetoed by the Governor. However, at the national level, the Federal Trade Commission’s (FTC) proposed rule is awaiting a final vote to institute a nationwide ban on non-competes. The vote is expected to take place in April 2024.  

Paid leave laws – Both Illinois and Minnesota have updated their paid leave laws statewide, which impacts local jurisdictions that may not have such stringent guidelines in place. Local entities are now scrambling to amend their requirements to coincide with the state mandates that went into effect on January 1, 2024.  

Illinois’ paid leave law says employees must accrue one hour of paid leave for every 40 hours worked and must be paid the employee’s hourly rate of pay. For employees who receive gratuities or commission, it must be paid at the greater amount of full minimum wage or their hourly rate, whichever is greater. Leave can begin using paid leave 90 days following the effective date of the law, or 90 days following the start of their employment, whichever comes later. Earned and unused leave must be carried over to the following year unless the leave is frontloaded at the beginning of the year.  

Minnesota Earned Sick and Safe Leave (ESSL) law gives covered employees up to 48 hours of paid leave per year if the employee works 80 hours in a year, according to the Minnesota Department of Labor and Industry. It allows employees to take time off for a variety of reasons including when the employee is sick, to care for certain family members when they’re sick, to seek assistance for themselves or family members if they’re experiencing domestic abuse, or school closures. Part-time and temporary employees are included; independent contractors are excluded. Employees accrue one hour of ESSL for every 30 hours worked, up to 48 ESSL hours maximum. Unused leave must be carried over to the following year, to a maximum of 80 hours. This law does not preempt local jurisdictions with more stringent requirements.  

Banning wage history inquiry – The growing wave of legislation surrounding pay continues to build momentum. Columbus, Ohio, is the latest city to enact a new law that employers with 15 or more employees are prohibited from making inquiries about wage or salary history. This includes job placement, staffing agencies, and other employment agencies that operate on behalf of an entity that meets the definition of an “employer” under the ordinance. It will be considered an “unlawful discriminatory practice” for employers to: ask about salary history, wages, benefits, or other compensation; screen applicants based on that history; rely solely on that history in deciding whether to extend and offer and/or determine wages, benefits, or other compensation for that applicant; and refuse to hire or disfavor, injure, or retaliate against the applicant for not disclosing such history. Employers may still discuss salary, benefits, and other compensation expectations for the job in question with the applicants. It’s important to note that there are exceptions to the rule. The law goes into effect March 1. 

nextSource Insights 

There are many factors to consider with these new rulings such as:  

  • Should the ban on non-competes pass, one would expect to see companies challenging this ruling. nextSource will be watching this closely and will report any forthcoming changes. In the interim, companies should follow the ruling as it stands. 
  • Companies in Illinois and Minnesota should review their current leave policies immediately to ensure they meet the new guidelines as well as plan for changes to comply with leave such as updating wage statements and notifying all employees of the change. California, New York, and New Jersey have also recently adopted mandates. Employers across the country should prepare as paid family leave is gaining traction across the nation.  
  • Pay transparency and equity is another area that is picking up speed nationally. Even in areas without a wage and salary history ban, employers should consider removing salary history questions throughout the recruiting process to be proactive and reduce their risk as remote workers and those applying from other geographical locations may expect pay transparency and equity. Pay transparency is becoming more important to candidates, so companies that display compensation ranges can expect to attract and retain top talent.