There is no denying the impact COVID-19 had on the workforce. Seemingly overnight, employers were forced to accept remote work, virtual meetings and automation simply to remain operational. However, the disruption also allowed employees an unprecedented opportunity to reevaluate their careers and work environments, leading to the mass exodus from the workforce seen in the last year.
As we emerge from the pandemic, employees seem more comfortable making direct demands for non-negotiable terms and conditions of employment. Fair wages and work-life balance are now baseline expectations. Employers must now also provide benefits to ensure employee well-being, autonomy and flexibility necessary to recruit and retain top talent. Most importantly, employees want to work for employers whose values align with their own, forcing employers to bring a little more humanity into their approach to managing employees. This increased attention to fairness, equity and inclusion in the workplace permeates legal issues touching on every aspect of employment law.
Pay Equity and Transparency
Numerous states are beginning to implement laws designed to promote and ensure pay equity and transparency in the workplace. California and Illinois now both have pay data and demographic reporting requirements, with Illinois also requiring a certificate of compliance with equal pay and anti-discrimination laws. States are also beginning to enact pay transparency laws requiring employers to disclose compensation to applicants during the hiring process, with states such as Colorado and Washington implementing laws requiring affirmative disclosure of compensation information in job postings. Coinciding with these laws, some states are also banning employers from inquiring into an applicant’s salary history and making hiring decisions based on this history. These laws eliminate avenues for pay disparity to creep into the workplace.
End to Forced Arbitration of Sexual Harassment and Sexual Assault Claims
President Biden recently signed into law a bill amending the Federal Arbitration Act to give employees the ability to avoid mandatory arbitration of sexual harassment and sexual assault claims. Employers must be wary of the impact this law has on its existing arbitration agreements with employees. An employee bringing a claim of sexual assault or harassment in the workplace now has the right to force their employer to litigate such claims in a public court proceeding rather than in a confidential arbitration.
Tracking and Paying Remote Work
In the face of resistance to returning to the office, many employers have chosen to allow exclusive or hybrid remote work schedules. However, these new flexible work arrangements are fraught with legal potholes for employers. Employers must be proactive to ensure non-exempt employees are paid for all the time actually worked, including overtime, and in the over twenty states with meal or rest period requirements, that employees are following these requirements. To do so, it is imperative that employers update protocols and policies requiring employees to accurately track hours worked, including the beginning and end of shifts, and all breaks taken throughout the day.
Unlimited Paid Time Off Policies
Especially with the rise of remote work, employers are embracing the employee-friendly trend of offering “unlimited” paid time off. When implementing these policies, employers must be mindful of how these policies may be impacted by state laws requiring payout of paid time off or vacation time at the end of employment and other job-protected leave mandated by state and federal law, such as the Family and Medical Leave Act.
Restrictions on Enforcement of Noncompete Agreements
Throughout the country, states continue to severely limit the use of noncompete agreements to restrict an employee’s ability to work, for example in a specific geographic area, after employment ends. Certain states, like California, North Dakota and Oklahoma, have an outright ban on noncompete agreements, while states like Virginia, Maryland, Nevada and Illinois have recently banned noncompete agreements with certain types of workers, such as low-wage or hourly workers. Illinois’ law, which went into effect on January 1, 2022, requires employers to provide a 14-day period of consideration on any noncompete or non-solicitation agreements and requires the agreement to advise the employee to consult with an attorney prior to entering the agreement. Other states, like Colorado and the District of Columbia, have civil and criminal penalties for executing prohibited noncompete agreements with workers. Employers must find new and different solutions to protecting their confidential information shared with employees as law makers continue to reign in employers’ ability to use noncompete agreements to bench employees after the end of their employment.
Hairstyle Discrimination Protections
Over the past five years, many cities and states began updating employment discrimination laws to protect traits associated with race, including hair characteristics, styles and grooming. Initially passed in California, more than 10 states have now passed versions of the CROWN (“Creating a Respectful and Open World for Natural Hair”) Act, to protect employees from such discrimination. Most recently, banning hairstyle discrimination has received federal attention, with the U.S. House passing a bill that would protect employees from discrimination based on natural hair and hairstyles associated with race and national origin.
Rewriting Policies and Forms to Promote Transgender and Nonbinary Inclusivity
On March 31, the Equal Employment Opportunity Commission announced its plan to expand the gender options in its voluntary self-identification questions on intake forms to include non-binary gender options. While these updates do not change employer-requirements, employers would be wise to follow their lead. Simple changes, like modifying applications to include non-binary selections and updating policies to be gender neutral, can go a long way toward fostering an office culture inclusive of transgender and non-binary employees.
Paid Family and Medical Leave State Laws
Paid leave has been a priority for employees for years, but since the pandemic, the focus has shifted to paid family and medical leave. At least 10 states, Washington D.C. and some cities have enacted paid family and medical leave laws, with at least 10 other states having such legislation introduced. Although the specifics of the laws vary by state, they typically provide workers with pay equal to a percentage of their income during protected leave to care for a family member who is ill, parental leave or for their own serious illness or injury.
Employers can expect to see these employment law trends continue in 2022 and beyond. The takeaway for employers is that there is no longer a one-size-fits-all plan for managing their workforce. Rather, employees expect—and the law increasingly requires—a culture that is inclusive to all and flexible enough to meet the varying needs of all employees.
Emma R. Schuering routinely represents employers in litigation involving a variety of employment matters, including restrictive covenants, trade secrets, and discrimination and retaliation claims. Emma also has significant experience representing employers against individual and class FCRA claims and advising clients on FCRA compliance. Emma started with Polsinelli in 2014 and was elevated to Shareholder in 2021.
Meghan H. Hanson focuses her practice on a wide variety of employment-related matters and regularly counsels employers as they face sensitive workplace litigation, including discrimination, retaliation, restrictive covenant and trade secret claims. Meghan started with Polsinelli as a Summer Associate before joining as an Associate in 2019.