HR Trends: How State Laws Affect Compliance in HR
Most major employment law changes come at the state and local levels. These local employment laws have a strong effect on HR trends across the U.S.
As some states such as California and New York enact laws dealing with compliance in HR, other states will start to adopt the same laws to keep up with these trends. As more states enact these changes, federal regulations will be influenced. Understanding how these state laws affect trends in HR will help you prepare for changes moving forward.
Employee Benefits
While many federal laws regulate employee benefits, several states and cities have added further laws designed to ensure benefits for employees. Many of these regulations focus on health coverage and paid leave.
Health Coverage Regulations
Each state regulates health coverage for employees in different ways. Some states have no requirements other than following federal mandates. Others place more stringent requirements on employers.
Hawaii, for instance, requires employers with even one employee to provide health coverage. Other states, such as New York, provide tax incentives to employers that offer health insurance.
As some states require or incentivize employee health coverage, more states will follow these HR trends. Federal regulations will also begin to follow suit with further health coverage requirements for employers.
Paid Leave-PTO
Many states have also started making significant changes to their paid leave laws. These changes include:
- Mandatory minimums for PTO hours
- Required PTO for part-time employees
- Mandatory participation in Paid Family & Medical Leave programs
For instance, as of January 1, 2024, both Illinois and Minnesota have put laws into effect requiring employers in these states to provide minimum paid leave hours. Maryland will soon follow this HR trend with a Family & Medical Leave Insurance Fund that will begin allowing deductions in October 2024.
Employee Pay
State laws regarding employee pay include minimum wage requirements, rules regarding overtime, employee breaks, pay transparency, employee classification tests, and pay equity. While there are federal regulations in place regarding these areas of employee pay, many states have further regulations designed to meet employee needs.
Wage Disclosure
The National Labor Relations Act has been a federal regulation since 1935, but many employers do not realize that this act gives employees the right to discuss their wages with coworkers. This law is in place to protect women and minorities by encouraging equal pay for equal work.
If your company has a nondisclosure agreement about wages, you could violate this law. Many states have also enacted further laws to protect employee rights in discussing wages and working together to improve wages.
Pay Transparency
One of the biggest HR trends catching on across the U.S. is state pay transparency laws. California was the state that began this trend, with New York and Washington quickly following suit.
To date, ten states have pay transparency requirements, with 14 more states considering passing laws around pay transparency. Many employers, even in states without the pay transparency requirement, have begun adding pay ranges to their job postings.
A bill has also been proposed in the House for a federal pay transparency law. If passed, this bill would require all employers to provide a pay range for posted jobs.
Pay Equity
The Equal Pay Act of 1963 and other federal mandates have regulations in place to prevent pay discrimination. Most states have instituted further regulations designed to remove pay discrimination issues further. In fact, 42 states have some form of pay equity requirements on the books.
While there is no federal requirement to conduct pay audits, many states have requirements to audit pay to reduce pay discrimination. Even in states where no requirements exist, it is good practice to complete regular pay audits, especially if you have employees in multiple states.
Banning Salary History Questions
To date, 22 states have bans in place regarding salary history. These states, in an effort to reduce pay discrimination, do not allow employers to ask questions about a potential hire’s salary history. This means employers are not allowed to use pay history as a standard to determine the compensation offered.
Nondiscrimination in the Workplace
Several federal laws deal with discrimination in the workplace. Many states also have laws in place to protect against workplace discrimination. For instance, every state except Mississippi, Alabama, and Georgia has laws in place against discrimination based on sex.
34 states have some form of law in place to protect against discrimination based on sexual orientation or gender identity. 24 states, and several municipalities, have enacted some form of the CROWN Act which protects against racial discrimination by outlawing discrimination due to hair styles.
New York City has passed a law to ban height and weight discrimination in the workplace starting a new HR trend. Washington, New York, New Jersey, Vermont, and Colorado are all now considering state laws against weight and height discrimination.
As more states enact nondiscrimination laws, it is important to make sure your policies and procedures do not lead to discriminatory acts. This starts with your hiring practices.
Make sure job ads are free of discriminatory factors. All job ads should focus on job-related requirements, not on attracting or eliminating certain groups. Using job description templates can help you avoid discriminatory language in your ads. These templates also can help ensure job performance reviews are based on nondiscriminatory factors.
AI Standards and Regulations
AI tools have made great strides in the workplace over the past couple of years. More organizations are researching and incorporating these AI tools for everything from creating marketing content to helping review job applicants.
This increased use of AI has led to many concerns, especially around data privacy and potential discrimination. These concerns have led many states to incorporate laws that, while not specifically geared towards AI, consider these tools when developing the laws.
12 states have developed data privacy laws that regulate how automated processing systems are used to sift consumer data. These laws require organizations to inform clients and customers of the use of these automated systems, including AI, and how their data will be used.
Many are also concerned that the use of AI tools in hiring and workplace security can lead to increased workplace discrimination. 7 states have passed laws that regulate the use of AI in decision-making processes such as hiring, workplace surveillance, or benefits risk assessments.
While AI tools can be beneficial in the workplace, it is important to ensure they are used cautiously as more research is done on the impact AI will have.
Best Practices to Manage Key HR Trends
Keeping up with state and local HR trends will help you manage your HR policies and practices and reduce your risk of falling into noncompliance. On top of this, there are steps you can take to ensure your company policies continue to meet changing needs and provide a positive work environment for all.
Keep up with Potential Changes
As stated, HR trends often start at the local and state level. Keeping up with what is happening in your community will help you determine coming changes to HR laws. An easy way to do this is to sign up for newsletters or bulletins that follow employment and compliance law changes. You can sign up for newsletters that follow state and federal changes, so you have the best information.
Many organizations will also have webinars that go into more detail about changing regulations. Find organizations you trust and make a point to attend webinars and other meetings they provide to address HR trends, laws, and policies.
You can also partner with experts to provide training to your leadership team and your employees about upcoming changes. Regular training will ensure everyone understands how to maintain compliance in the workplace.
Transparency in the Workplace
The best way to avoid issues in the workplace is to maintain transparency. Communicate pertinent laws and employee rights with all employees. Make sure they understand how current and future laws affect them and their status in your company.
Maintain Privacy Policies
It is your responsibility to protect the privacy of your employees and your customers. Make sure you have policies in place that maintain the privacy of the data you maintain. Ensure no private information can be accessed by non-authorized personnel or outside organizations.
When using tools to protect data, make sure you fully understand the privacy policies in place.
Listen to Your Employees
How your employees feel in the workplace is a big indicator of potential HR trends you need to address. Make sure you provide options for employees to report issues of potential noncompliance or unethical practices.
Take these complaints seriously and put policies in place to investigate any issues that arise.
Institute Consistent Disciplinary Actions
One of the quickest ways to find yourself on the wrong side of HR compliance issues is to not have a consistent policy in place to deal with disciplinary issues. All employees should be treated the same when it comes to dealing with complaints and issues.
Outline a clear policy that everyone understands when it comes to investigating complaints and issues. Make sure everyone involved understands the policies in place, and that these policies are followed in all instances.
Most importantly, make sure you maintain a paper trail of all investigations and disciplinary actions taken in the workplace. This paper trail will help protect you against legal issues if you can show you have a good policy in place that is followed every time.
Manage Workplace Policies
All company policies should be applied evenly across your organization. Document and regularly review the policies you have in place. Make sure everyone has easy access to these policies and any changes that occur. A good practice is to have employees sign that they have access and understand the policies and changes.
It’s also a good idea to create checklists that help break down policies and ensure you maintain compliance. Putting someone in charge of company policies will help you keep up with any changes that are needed.
Ensure Compliance in HR Laws and Trends
HR compliance can be tricky as laws are constantly changing. That’s why it is important to have access to the best tools and resources to manage your HR needs.
A good place to start is to review your current HR policies to ensure you are keeping up with HR trends and laws. Not sure where to start with a review? Access our free HR assessment to get started.
Notes: These HR trends are up-to-date as of March 2024. You will want to check your state and local laws regularly to ensure you maintain compliance with any new laws that go into effect after this date.
Written by: Penny Clark