It matters who wins — but not the same way it used to

Looking at compliance over the next 10 years, there is a lot to speculate about, attorney Marissa Mastroianni, an associate at Cole Schotz, told HR Dive: “It depends on who wins the 2020 election and whether Democrats or Republicans are in control of Congress.”

“So much depends on politics,” concurred Michael MacHarg, partner at Freeborn & Peters.

But this doesn’t necessarily mean a slew of new laws. “It’s less likely that we will see federal employment-related legislation, given paralysis in Congress, the rules, and how they operate. The parties are becoming more extreme, rather than less, in terms of asks,” said Steve Greene, a member of WorldatWork’s Total Rewards Expert Council.

Federal agencies, on the other hand, have become increasingly important and active, said Greene, and are implementing substantive changes. “Over the next 10 years, that’s where we will see the action from a federal perspective. They can accomplish much of what would be accomplished through legislation.”

Greene noted that federal courts will remain important, but primarily from a forum-shopping perspective: “Parties know which [courts] are more favorable to their views, and that’s where they file.”

Unabating state and local activity

In 2018 and 2019, said Mastroianni, employers saw a lot more regulation, much of it from state and local governments. “HR professionals can expect that to continue in 2020 and beyond,” she said.

That’s a significant burden for employers: Oten, the standards are higher, penalties are more severe, and there are simply more of these local rules, Greene said. Given the gridlock taking place at the federal level, “state and local governments have picked up activity in certain parts of the country, but not others, which only adds to the checkerboard approach,” he said.

“It’s difficult for HR to keep up with everything,” agreed Mastroianni — especially employers that operate in multiple locations. She noted that Maine, for example, recently passed a law authorizing paid leave for any reason. “If you have an office in Maine, do you extend that same leave to your employees elsewhere?”

“Back in the day,” Greene said, “most employers preferred to have a common approach and treat all employees the same. This was simply viewed as fair.” But now, such an approach is becoming “increasingly impossible with all of these unique and in some cases inconsistent standards.” Multiple carve-outs are needed for policies and procedures, he noted, which makes compliance difficult for employers of all sizes.

Areas of focus

Paid leave

Paid leave laws are likely to continue to evolve with perhaps more states and localities issuing mandates, according to attorney Susan Harthill, partner at Morgan Lewis, who spoke to HR Dive via email. “[A]t some point in the future, efforts to enact a federal paid leave law may succeed, particularly now that Congress has enacted legislation that gives federal workers 12 weeks of paid leave,” she said.

A “new frontier may be state paid leave laws,” said Mastroianni. “Not necessarily sick leave, but more like paid vacation leave, at the local or state level,” such as the new Maine law. “I know for a fact this idea has been kicked around the New York City council.”

Sexual harassment

As state and local governments continue to respond to the #MeToo movement, more action on that front is likely. State legislatures, for example, will make sexual harassment definitions “a little clearer and more thorough” over the next several years, MacHarg predicted.

“There will be more practices to combat sexual harassment in the workplace,” Mastroianni said. “More required anti-harassment training and things of that nature.”

The gig economy

“The gig economy will likely continue to grow,” said Harthill, “and the issues around how traditional employment law principles apply will likely continue to be litigated, with perhaps more states attempting to legislate around issues like employee classification. Employers will need to pivot to keep up with new laws and the changing business and legal landscape.”

Wage and hour

“Wage and hour trends are always politically specific, but there are certain industries that are targeted for looks over a period of time,” said MacHarg. “That trend won’t change.”

MacHarg also pointed out the “incredible prevalence of state, local and sub-local wage ordinances.” He cited California as an example, with a lot of activity in the San Francisco Bay area, including Berkeley and beyond. “Those trends will continue in larger urban areas.”

Marijuana

“Marijuana legislation will remain an evolving area of the law,” said Harthill. “We can likely expect more states to decriminalize cannabis use and regulate in this area. The federal government may at some point address current bills that range from easing limits in medical research to legalizing marijuana entirely.” Harthill noted that the House Energy and Commerce Health Subcommittee held in January its first-ever hearing on the current slate of bills.

MacHarg also said he expects to see this topic taking precedence in both the short and the long term: “Eventually there will be federal legislation,” he said, and state legislatures are starting to treat medical marijuana use in the workplace more leniently even though it’s still classified as a Schedule I substance federally. He noted that he does not expect true changes to the marijuana rules in the transportation industry, however.

Pay equity

Employers are facing public pressure to ensure pay equity, and Mastroianni said she believes this will be a continued focus. “A lot of states have pay equity laws and there are more to come,” she said.

Noncompetes

“The legality of noncompete clauses in employment agreements will also likely continue to be litigated, and we may see an uptick in states and localities banning such clauses, at least for low-income workers,” said Harthill. “The federal government has slowly started paying attention, with the FTC and Senate taking up hearings.”

Is federal pre-emption on the horizon?

Given the ever-growing patchwork of state and local rules, is it possible that the federal government will act to standardize the landscape?

“We hope for that outcome,” said Greene. “The problem is that either party (employer or employee) is trying to game the system. Employers, for example, want pre-emption when state and local governments are adverse to our interests.” Employees generally champion states’ rights for similar reasons, he said.

Harthill said pre-emption “seems very likely” and cited paid leave as an example of the patchwork approach employers are currently forced to navigate. “Congress could address [it] through careful drafting of a preemption provision.” Similarly, she said, if “Congress does legalize marijuana, the legislation may go further and legislate some of the same areas that state laws cover, in which case it makes sense to include a pre-emption provision.”

Mastroianni said she is less hopeful, pointing out that lobbying for national laws to create a more coherent framework is happening now, but to little effect.

An exciting, yet challenging, time to be in HR

Organizations of all sizes, said Greene, are looking for “certainty, consistency and decisions that have a long-term shelf life.” What they are getting, however, is inconsistent rules and agency guidance “which is nearly 180 degrees different from prior guidance” when an administration changes. Even large organizations with deep resources are having difficulty managing all of these moving parts, he said — and “flat-out inconsistencies...[put] employers in a very unrealistic position.”

MacHarg, on the other hand, was more optimistic, noting that this is “a great time to be an employment professional” given the dynamic environment. “It’s so important to keep your skills and learning sharp.”