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What Can Employers Expect in 2023?  An Overview of the Labor and Employment Regulatory Landscape

Tonya Fletcher SPHR, SHRM-SCP
by Tonya Fletcher SPHR, SHRM-SCP on December 16, 2022

While employers have been endeavoring to stay on top of employee retention and engagement challenges in 2022, such as quiet quitting and the multi-generational workplace to give two examples, evolving legislative actions continue to add to employer responsibilities.

What are some of the trends? Read below to learn more and to check out items on the horizon for 2023.


November, voters in Maryland and Missouri passed measures to legalize marijuana use. It has been a decade since Colorado became the first state to legalize marijuana in 2012.  No state law requires an employer to tolerate marijuana use at work or employees who work under the influence. Although President Biden recently issued an executive order to pardon thousands of people with federal charges of possession of marijuana, marijuana remains illegal at the federal level.

Minimum Wage: 

On Election Day last month, voters in Washington D.C. passed Initiative 82 which will gradually eliminate the district’s minimum wage tip credit by 2027. And in Nebraska and Nevadavoters continued the trend of choosing minimum wage increases by state ballot. In Nebraska minimum wage will increase to $15 an hour by January 2026 and in Nevada minimum wage will be $12 an hour by July 2024. More than a dozen states will also see their minimum wages increase in January 2023 as employers and employees continue to deal with the effects of inflation.

Nondisclosure Agreements:

Earlier this year Washington state made nondisclosure agreements (NDAs) in employer settlements and contracts unenforceable for harassment and discrimination. A handful of states, including Maine and California, already restrict how employers can use NDAs in cases of harassment and discrimination. On the federal level, The Speak Out Act - a bill that would make nondisclosure agreements and non-disparagement contract clauses relating to disputes involving sexual assault and sexual harassment unenforceable in court if they were signed before a dispute arose - has passed both chambers of Congress and the President signed it on December 7, 2022.

Paid Family and Medical Leave:

Delaware and Maryland enacted mandatory paid family leave laws in 2022. Previously passed mandatory paid leave laws in Oregon and Colorado have employers and employees beginning their contributions January 2023. While in Congress paid family and medical leave legislation continues to stall, this trend is predicted to continue on the state level.

Pay Equity:

A growing number of states and cities have started implementing pay transparency laws requiring the disclosure of pay information to applicants, and even employees upon request. This leads on from the trend the last few years of salary history restriction laws that limited an employer’s ability to ask about a job applicant’s salary history as a way to determine compensation. In 2022, the DOL Office of Federal Contract Compliance Programs (OFCCP) issued its first Directive to address the requirement that federal government contractors and subcontractors perform pay equity audits.

Worker Rights:
Voters in Tennessee just adopted a constitutional amendment prohibiting employers from requiring union membership as a condition of employment, also known as a right-to-work law. On the flip side, Illinois voters approved an amendment to the state Constitution guaranteeing the right to bargain collectively. Unionization continues as a hot workplace topic. In Fiscal Year 2022 (October 1, 2021 – September 30, 2022), there was a 53% increase in union representation petitions to the National Labor Relations Board (NLRB) from Fiscal Year 2021.

Worker Status: 

The U.S. Department of Labor (DOL) plans to apply a version of the “economic realities test” as its standard for determining whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). Under its proposed regulation, six factors would be used to guide the determination.  The DOL is also expected to review – for the third administration in a row – the exemption of executive, administrative and professional employees from the FLSA minimum wage and overtime requirements. A higher salary level threshold is likely. Updates were expected in 2022 but it looks like a proposed rule will now come in 2023.

Workplace Technology: 

Starting last April, a New Jersey employer who makes use of a tracking device in a vehicle used by an employee without providing written notice to the employee is subject to a civil penalty. Last May, New York began requiring covered employers to provide prior notice to employees before engaging in electronic monitoring. Starting on January 1, 2023, New York City employers that utilize artificial intelligence (AI) decision-making tools in their hiring practices will have to provide notice to applicants of the technology and conduct independent audits to ensure that these tools do not have a discriminatory impact. The NLRB also just announced their intent to bring unfair labor practice charges against employers whose use of electronic monitoring and/or automated decision- making tools compromise employee protected activity.

When you partner with a Professional Employer Organization (PEO) like FrankCrum, you gain a team of experts to help you stay in compliance with new and evolving employment regulations. Learn what FrankCrum can do for you by clicking here

Tonya Fletcher SPHR, SHRM-SCP
Tonya Fletcher SPHR, SHRM-SCP

Tonya is the Labor Compliance Manager at FrankCrum. In this role, she leads the FrankAdvice team of HR consultants and manages the delivery and content of best practice HR information to client owners and managers. When she’s not at work, Tonya enjoys international travel.