As we step into the year 2024, the landscape of labor laws in various states across the United States is undergoing a series of significant changes. These transformations have direct implications for every organization and its employees. For professionals in the HR field, understanding these new legal mandates and strategically adapting to them is crucial for ensuring compliance, protecting employee rights, and maintaining healthy employment relationships. Let’s delve into some of the key labor law changes in 2024 in the U.S., including new regulations on non-compete agreements in California and Maryland, and the expansion of OSHA’s requirements for reporting workplace injuries and illnesses.
1. FTC’s New Regulations on Non-Compete Agreements
In 2024, the Federal Trade Commission (FTC) introduced a significant new regulation that could profoundly impact non-compete agreements. The FTC’s proposal aims to abolish existing non-compete clauses and prohibit future agreements between employers and workers. This proposal has sparked widespread discussion and debate, with a final conclusion expected by April 2024.
The proposal emerged against the backdrop of the widespread use of non-compete clauses and their potential negative impact on employee mobility. Typically, these agreements restrict employees from working with competitors or starting similar businesses within a certain period after leaving their job. The FTC’s proposal intends to enhance the labor market’s competitive environment and increase employees’ freedom in job choices.
The proposal also considers the detrimental impact such agreements might have on small businesses and innovation, as they could limit the flow of expertise and skills, thereby stifling market innovation.
The FTC’s final decision will significantly impact employers and employees across various industries in the U.S. Employers will need to review their existing employment contracts to determine the impact of this proposal on their terms. Meanwhile, employees should be aware of how this change might affect their career choices and mobility.
Given the significance and potential wide-reaching impact of the FTC proposal, HR professionals and employers should closely monitor this development and be prepared to make necessary adjustments once the regulations take effect. These adjustments could include modifying employment contracts, reevaluating employee retention strategies, and considering how to protect business secrets and intellectual property without relying on non-compete agreements.
2. NLRB’s Updated Joint Employer Standard
Another crucial legal change in 2024 is the National Labor Relations Board’s (NLRB) update to the joint employer standard, which will profoundly impact many businesses. The new rule redefines the criteria for a joint employment relationship, potentially identifying more situations as joint employment.
Under the new standard, two or more entities may be considered joint employers of a group of employees if each entity: has an employment relationship with the employees and possesses the power to control one or more essential terms and conditions of employment. NLRB defines “essential terms and conditions” as wages, benefits, other compensation, hours and scheduling, assignment of work duties, supervision of work performance, work rules and guidance, and workplace conditions related to employee safety and health.
The new rule clarifies that joint employer status can exist even if an employer does not directly exercise this control or has reserved but never exercised such control. This marks a clear departure from the 2020 rule, which required a joint employer to have “substantial direct and immediate control” over essential employment terms and conditions.
What does this change mean for businesses?
The implementation of the new standard could lead to more businesses being classified as joint employers, significantly impacting employers’ responsibilities and rights. For instance, businesses need to be more cautious in establishing partnerships with other companies or contractors, ensuring that their potential control over employees does not lead to a joint employer determination.
Businesses might need to reassess their contracts with third parties to determine potential joint employer liabilities. Moreover, companies might need to review their HR policies and practices to ensure alignment with the new joint employer standards.
For HR professionals, understanding this new standard and preparing accordingly is crucial. This includes collaborating with legal counsel to ensure company policies and practices comply with the new requirements and training management on how these changes impact business operations.
3. OSHA’s Expanded Requirements for Reporting Workplace Injuries and Illnesses
In 2024, the Occupational Safety and Health Administration (OSHA) significantly expanded its requirements for the submission of workplace injury and illness data. Effective from January 1, 2024, the new regulation aims to enhance workplace safety and transparency.
Which employers are required to submit data under the new regulation?
Institutions in certain high-risk industries (such as agriculture, manufacturing, entertainment, construction, etc.) with 100 or more employees must annually submit their Form 300 (Log of Work-Related Injuries and Illnesses) and Form 301 (Injury and Illness Incident Report) to OSHA. Additionally, these submissions must include Form 300A (Summary of Work-Related Injuries and Illnesses).
To improve data quality, these institutions are required to include their legal company name when submitting electronic records to OSHA.
How will OSHA use this data?
OSHA plans to publish some of the collected data on its website, allowing employers, employees, potential employees, employee representatives, current and potential clients, researchers, and the public to make informed decisions using information about a company’s workplace safety and health records.
What does this change mean for employers?
Employers need to review and update their reporting procedures to ensure compliance with the new regulations starting January 1. This might require additional record-keeping and reporting work to ensure all relevant workplace injuries and illnesses are accurately recorded and promptly reported to OSHA. Employers should also be mindful of how OSHA’s use of this data might affect the public perception of the company’s safety record.
For HR professionals, understanding this change and ensuring corporate compliance is vital. The HR team needs to work closely with the safety and health department to ensure all necessary records and reports are ready and submitted to OSHA within the stipulated timeframe.
The expansion of OSHA’s requirements for reporting workplace injuries and illnesses is a significant step toward increasing workplace transparency and safety. Employers and HR professionals need to be aware of these changes and take appropriate measures to ensure compliance with the new regulations.
4. New Regulations on Non-Compete Agreements in California and Maryland
In 2024, California and Maryland introduced new legal changes regarding non-compete agreements, significantly impacting agreements between employers and employees.
California’s New Regulation
From January 1, 2024, California implemented a new law prohibiting employers from entering into non-compete agreements with employees. This new regulation applies to both newly signed agreements and existing ones, regardless of when and where they were signed. Moreover, California requires employers to notify current and former employees (employed since January 1, 2022) that their signed non-compete agreements are now invalid. This legal change reflects California’s commitment to enhancing workforce mobility and promoting a fair competitive environment.
Maryland’s New Regulation
Maryland also limited the use of non-compete agreements from January 1, 2024. The new law prohibits non-compete clauses for employees earning equal to or less than 150% of the state’s minimum wage (equivalent to $15 per hour in 2024). This change means that low-wage workers will no longer be constrained by post-employment restrictions, thereby enhancing their job opportunities and career development.
Impact on Employers and HR Professionals
These new regulations require employers and HR professionals to reassess their use of non-compete agreements. Particularly in California, all existing and future non-compete agreements will become invalid, potentially requiring businesses to reconsider how to protect their trade secrets and intellectual property while complying with new legal requirements. In Maryland, employers need to be especially careful to ensure that employment contracts for low-income workers meet the new legal standards.
As we delve deeply into the significant updates in U.S. labor laws for 2024, it is evident that these changes mark an important shift in the labor market and employment landscape. As HR professionals, we must maintain flexibility and adaptability to ensure our organizations smoothly transition to these new legal frameworks. This involves not only complying with the law but also maintaining a fair, transparent, and competitive work environment to support the ongoing development of our employees and business. Let’s work together to embrace these changes as new opportunities and thrive in this evolving labor law environment.
