Let’s Review…Dec 19, 2023
Employment Law Regulations and Trends to Watch in 2024
It’s been an unusually active regulatory year at several federal agencies, and just glancing at the U.S. Department of Labor’s regulatory agenda for 2024 tells us that the year ahead will be similarly busy and dynamic. What follows are a few employment law regulations and trends employers should keep on their radar screens in the coming months.
AI is one of the most fast-paced and revolutionary changes affecting our culture these days, and most pundits believe that the business leaders of tomorrow must have — or must plan to have — a clear and comprehensive AI strategy now.
For employers, the potential and dangers are mindboggling. AI technology will theoretically enable employers to remove the guesswork from a range of everyday tasks as well as more significant decisions. One of the biggest concerns with using AI in human resources is the potential for unrecognized racial and gender bias.
While President Biden’s recent Executive Order (EO) about AI is not a new law or regulation that employers are legally required follow, it is a helpful preamble to the significant guidance coming from the federal government shortly. The Secretary of Labor, for example, only has 180 days from the publication of the EO to “publish principles and best practices for employers that could be used to mitigate AI’s potential harms to employees’ well-being and maximize its potential benefits.” These principles must cover the risk of job displacement stemming from AI, the implications of AI for labor standards and job quality, and the implications for workers if AI systems collect and use data about them.
That’s a tall order to complete by the end of April 2024, but whenever it ultimately gets published, this guidance promises to be fascinating reading.
Joint Employer Rule
The National Labor Relations Board (NLRB) recently delayed the effective date for the new joint employer rule, which was just announced in October. It was scheduled to take effect on December 26, 2023. The new effective date is February 26, 2024.
The new rule broadens the definition of “joint employer” to include any entity with the authority to control at least one of seven “essential terms and conditions of employment.” Employers are encouraged to work with other employers — for the benefit of both — to revise any agreements to avoid or minimize the risk of a joint employer determination by the NLRB.
The delay in the effective date comes after multiple legal challenges to the rule, including a group action led by the U.S. Chamber of Commerce.
Child Labor Laws
Employers sometimes look to fill some jobs with minors in a tight job market. Over the past few years, many industry groups pushed state legislatures to modify basic Fair Labor Standards Act (FLSA) child labor protections to ease labor shortages.
In February 2023, the Department of Labor (DOL) and the Department of Health and Human Services (HHS) announced a new enforcement initiative to “combat exploitative child labor.” The DOL found that in 2022, child labor law violations were on the rise. Eight hundred thirty-five companies it investigated had employed over 3,800 children in violation of federal child labor laws. According to the memo announcing the initiative, the increase in child labor exploitation has been partly created by “an influx of migrant children from Latin America fleeing violence and poverty, a majority of whom do not have a parent in the United States.”
On November 28, 2023, the DOL’s Wage and Hour Division published Field Assistance Bulletin No. 2023-4 about “child labor civil money penalty assessment for nonserious injury and noninjury violations.” Per this guidance, field personnel will no longer determine assessments on a per-child basis but on a per-violation basis. In other words, if three child labor law violations concern one child, the employer will now be assessed three separate penalties, each of which can reach the statutory maximum of $15,138 per violation. The Bulletin also provides instructions on how to adjust the penalties depending on the gravity of the offense and the size of the employer.
Injury and Illness Reporting
Last July, OSHA created four different categories of electronic reporting obligations. As of January 1, 2024, employers with less than 20 employees have no electronic reporting obligations. Establishments with 20-249 employees and listed in Appendix A of 29 CFR 1904 are only required to file Form 300A–Summary. Employers in high-hazard industries with 100 or more employees and listed in Appendix B to Subpart E of Part 1904 must submit OSHA Form 300–Log of Work-Related Injuries and Illnesses, Form–301-Injury and Illness Incident Report, and Form 300A–Summary. Establishments with over 250 employees in all covered industries must file Form 300A–Summary. This information must be submitted electronically using OSHA’s online Injury Tracking Application (ITA).
The DOL wants to revise overtime rules. Back in September, the DOL published a Notice of Proposed Rulemaking (NPRM) in the Federal Register that will, if enacted intact, revise the “white collar” overtime exemption rules that apply to executive, administrative, and other professional employees. Under the new rule, workers making less than $55,068 ($1,059 per week) will automatically be entitled to time-and-a-half pay for hours worked over 40 in one week. This is up significantly from the $35,568 floor set during the Trump administration.
While the rule could change before it becomes final, employers should still prepare for some version of the proposed rule to become final in the coming months.
Affirmative Action, DEI, and the EEOC’s Strategic Plan
After the Supreme Court ruled that affirmative action in the educational sector — using race in college and university admissions — is unconstitutional, there has been a growing wave of challenges to employer DEI (diversity, equity, and inclusion) programs.
As those lawsuits go through the court system, the EEOC has released its Strategic Plan for 2022-2026, which provides the overarching framework for achieving the agency’s mission. The new plan prioritizes the need to make the agency more accessible to the public and aims to enhance resources for training and investigations.
The EEOC’s Strategic Enforcement Plan for 2024 – 2028, published in September, works with the strategic plan by “establishing substantive law enforcement priorities.” In this document, the EEOC says it filed 143 new lawsuits this year — a 50 percent increase over 2022. An important focus is on “systemic” discrimination lawsuits. According to the EEOC, systemic discrimination targets a “pattern or practice, policy, and/or class.” The agency filed 25 systemic discrimination cases in FY 2023 — double the number in the past three years.
In the year ahead, we can anticipate that the EEOC will continue to pursue more systemic lawsuits, as well as lawsuits challenging barriers in recruiting and hiring, qualification standards, and other workplace policies that the EEOC may allege discriminate against a particular class of individuals — like people living with disabilities.
Employers are encouraged to review, update, and implement clear anti-discrimination policies, provide diversity and inclusion training, and foster an environment that values individual differences.
If you have any questions or legal concerns about any emerging employment law issue or workplace challenge, don’t hesitate to contact Orr & Reno for assistance.