Employment Law Updates: What In-House Counsel Needs to Know

In-house counsel play a crucial role in navigating the landscape of employment law. With new legislation, regulatory changes, and evolving case law shaping the rights and responsibilities of employers and employees, staying informed is more important than ever. This blog post outlines the latest updates in employment law and provides practical guidance for in-house counsel to ensure compliance and mitigate risks.

Remote Work and Wage-and-Hour Compliance 

The rise of remote and hybrid work arrangements has introduced new challenges for wage-and-hour compliance. Employers must ensure that remote workers are properly compensated for all hours worked, including overtime.

Key areas to watch include:

Time Tracking: The U.S. Department of Labor (DOL) emphasizes the importance of accurate time tracking for remote employees. Employers should implement reliable systems to capture all hours worked, including time spent responding to after-hours emails or attending virtual meetings.

Reimbursement for Remote Work Expenses: Some states, including California, require employers to reimburse employees for necessary business expenses incurred while working remotely. In-house counsel should ensure that their expense reimbursement policies comply with applicable state laws.

Off-the-Clock Work: Employers must train managers and employees to avoid off-the-clock work. Failing to compensate employees for such time can lead to costly wage-and-hour claims.

Action Steps: Review and update timekeeping policies, ensure compliance with state-specific expense reimbursement laws, and conduct training for employees and managers on wage-and-hour best practices.

Evolving State and Local Laws on Pay Transparency 

Pay transparency laws are gaining momentum across the United States, requiring employers to disclose salary ranges in job postings or provide such information upon request. States like California, Colorado, and New York have enacted legislation aimed at promoting pay equity and reducing wage disparities.

Key considerations for in-house counsel include:

Job Postings: Ensure that job postings comply with state-specific pay transparency requirements, including disclosing salary ranges and benefits.

Internal Pay Equity: Conduct internal audits to identify and address pay disparities that could trigger claims of wage discrimination.

Record-keeping: Maintain documentation supporting salary decisions, including job descriptions, performance evaluations, and market data.

Action Steps: Develop a compliance framework for pay transparency laws, train hiring managers on disclosure requirements, and establish a regular schedule for pay equity audits.

Non-Compete Agreements Under Increased Scrutiny 

Non-compete agreements have faced heightened scrutiny from lawmakers, regulators, and courts. The Federal Trade Commission (FTC) has proposed a rule that would ban most non-compete agreements nationwide, citing their adverse effects on workers and competition. Additionally, many states, including California, Illinois, and Washington, have enacted laws restricting the use of non-competes, particularly for low-wage workers.

Key considerations for in-house counsel:

State Law Compliance: Ensure that non-compete agreements comply with state-specific restrictions, including requirements for consideration, notice, and enforceability.

Alternative Protections: Consider using non-solicitation agreements, confidentiality agreements, and trade secret protections as alternatives to non-competes.

Employee Mobility: Balance the need to protect proprietary information with employees’ rights to pursue new opportunities.

Action Steps: Audit existing non-compete agreements, revise agreements to align with state and federal regulations, and explore alternative legal mechanisms to protect business interests.

The Rise of Artificial Intelligence in Employment Decisions 

Employers are increasingly using artificial intelligence (AI) tools for hiring, performance evaluation, and workforce management. However, the use of AI raises significant legal and ethical concerns, including potential bias and discrimination.

Recent developments include:

EEOC Guidance: The Equal Employment Opportunity Commission (EEOC) has issued guidance on the use of AI in employment decisions, emphasizing the importance of avoiding disparate impact discrimination.

State Regulations: States like New York and Illinois have enacted laws regulating the use of AI in hiring, requiring transparency, bias audits, and notice to applicants.

Litigation Risks: Employers face potential lawsuits if AI tools lead to discriminatory outcomes. In-house counsel must carefully vet AI vendors and ensure compliance with anti-discrimination laws.

Action Steps: Develop policies for the ethical use of AI, conduct regular audits of AI tools, and train HR and legal teams on compliance with applicable laws and guidance.

Workplace Safety and the Post-Pandemic Landscape 

Workplace safety remains a top priority in the wake of the COVID-19 pandemic. Employers must navigate a complex web of federal, state, and local regulations to ensure a safe working environment.

Key updates include:

OSHA Compliance: The Occupational Safety and Health Administration (OSHA) continues to enforce COVID-19 safety protocols, including ventilation standards and protective equipment requirements.

Vaccination Policies: Employers implementing vaccination requirements must balance workplace safety with accommodations for medical and religious exemptions under the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act.

Remote Work Ergonomics: Employers should address ergonomic risks associated with prolonged remote work to reduce workers’ compensation claims.

Action Steps: Conduct safety audits, update policies to reflect current OSHA guidance, and provide training on remote work ergonomics and accommodation processes.

Unionization and Labor Relations Trends 

Union activity is on the rise, driven by high-profile organizing efforts at companies like Amazon and Starbucks. The National Labor Relations Board (NLRB) has also signaled a pro-employee stance, revisiting key precedents and expanding protections for concerted activity.

Recent developments include:

Joint Employer Standard: The NLRB is reconsidering the joint employer standard, which could expand liability for companies that exert indirect control over workers.

Employee Handbook Policies: The NLRB has scrutinized employer policies that could be interpreted as chilling employees’ rights to organize or engage in concerted activity.

Union Elections: Changes to union election rules aim to streamline the process and address employer interference.

Action Steps: Audit employee policies for compliance with NLRB standards, train managers on labor law, and prepare for potential unionization efforts.

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