A new year is the perfect time for employers of all sizes to review their policies and practices ensuring they’re up to speed and in compliance with national, state, and local laws. It’s also the time to reflect on the previous year and the hot-button issues that emerged during 2022 and will likely affect the workplace in 2023.
Can Unions Come to Your Workplace?
Unions and the National Labor Relations Board (NLRB) were extremely active in 2022, and that trend is not expected to slow. The belief that unions are limited to the public sector and skilled labor positions are myths perpetuated throughout all industries. As large and small companies alike discovered in 2022, unions are actively recruiting to expand their presence into new workplaces and have been successful in doing so. To compound matters for employers, the NLRB issued several decisions in 2022 protecting employees’ right to associate and making it increasingly difficult for employers to maintain a union-free workplace.
Employers of all sizes should start the year with a thorough review of their policies prohibiting outsiders from soliciting in their workplace. This is the most effective tool employers can use to keep their workforce union-free. Ultimately, however, the best way to keep a union from organizing in your workplace is to offer competitive compensation, a good work environment, and listen to employees and meaningfully respond to the changes they want to see. If the workforce is happy with the work environment, then there is little benefit to inviting a union to sit at the table.
Employees & Independent Contractors: What’s the difference?
Whether a worker should be compensated as an employee or an independent contractor continues to flummox employers. It’s easy to see why: In the past five years, the Department of Labor (DOL) issued new interpretive guidance, expanding the ability to compensate individuals as independent contractors, and then subsequently repealed that guidance. Currently, the DOL is set to issue another set of new regulations on this issue, to take effect in 2023.
In addition, the DOL is only one of several state and federal agencies that utilize its own tests to determine whether a worker should be an employee or an independent contractor. It continues to be the safest course of action for an employer to classify its regular workers as employees. That may not be appropriate in all situations, though.
A consistent test to evaluate a worker’s appropriate status is the degree to which the potential employer exercises control over the worker. Does the employer control when, where, and how workers perform their work? If the answer is generally yes, the worker is likely an employee. What about a highly skilled worker who works on a per-project basis, generally sets their schedule, and determines how the work is performed? In that case, the worker could possibly be an independent contractor. It is a distinction with significant implications, including unpaid taxes, workers’ compensation coverage and entitlement to other employment benefits, and general employment law coverage of the worker. With the DOL preparing to issue its final rule in 2023, this will surely continue to be an issue at the forefront of employment litigation.
How Do New Leave Laws Affect My Workforce?
There are precious few federal laws protecting an employee’s job during a leave of absence from work. The most well-known is the Family Medical Leave Act (FMLA). Another example is the Uniform Services Employment and Reemployment Rights Act (USERRA), providing job-protected leave to members of the armed services. Both laws have existed for some time, although they remain tricky for many employers to apply properly.
With the start of 2023, many new state and local leave laws (providing both paid and unpaid leave) took effect, and not only in California (which has, for some time, been the most active jurisdiction in this area of legislation). Now, however, an increasing number of states and local jurisdictions are expanding the scope of job-protected leave and benefits. Any employer with a multijurisdictional presence should pay close attention to new legislation in the states and localities where their employees work, how that affects protected leaves of absence, and whether or not an employee must be paid while on leave. These laws affect employers of many different sizes, and employers risk running afoul of these laws by assuming they have too few employees to be covered under these state and local laws.
Are My Company’s Non-compete Agreements Still Valid?
The landscape for employers that wish to enforce non-compete agreements against former employees continues to become more complex. States are actively restricting enforcement of these agreements, either entirely or as against any employee who earns wages below particular thresholds. As with the increase in job-protected leave, many employers continue to assume that these restrictions only apply in California, which is untrue. Many states nationwide have varying levels of restrictions on non-compete AND non-solicitation agreements.
Employers with employees in multiple jurisdictions must carefully review the laws that apply in these jurisdictions and consult with counsel to get ahead of any challenges they may face enforcing these types of contracts. In addition, every employer needs to carefully watch for the expected Federal Trade Commission regulations that will restrict these agreements nationwide, coming later this spring. It is too late to address these matters when an employee leaves.
Like many other business owners, you may be left with more questions than answers as you review your employment practices. Set your business up for success in 2023 by contacting your employment law attorney or any member of our employment law team.