The past year has brought sweeping changes to the world of work. Federal agencies finalized rules on minimum wage and overtime exemptions, union representation elections, pregnancy accommodations, OSHA inspections, and non-compete agreements. The Supreme Court scaled back agency rulemaking authority and lowered the bar for bringing discrimination claims. State legislatures expanded the patchwork of employment laws on a host of workplace topics. Meanwhile, the looming presidential election adds another layer of uncertainty to the mix.

To help employers navigate some of these changes, Littler’s Workplace Policy Institute (WPI) has released its seventh annual Labor Day Report examining 10 economic, labor, and employment issues facing employers this Labor Day.

1.  Labor force participation for prime-age workers continues to increase, yet worker shortages remain

Post-pandemic, the U.S. economy as a whole continues to show signs of growth and improvement, although the pace might be cooling, as reflected in recently revised employment data released by the Department of Labor. During the second quarter of 2024, the economy expanded by an annual rate of 3%. Inflation (2.9% in July), while still a concern, has eased, continuing a downward trend since March. Unemployment crept up to 4.3% in July, although this rate is still considered relatively low. A large portion of this increase in unemployment was due to temporary layoffs, so it is too early to tell whether the increase is a sign of weakened labor market growth or a normal fluctuation exacerbated by hurricane-related closures.

The latest data on the hiring rate (3.4% for June 2024) remains greater than the quits rate (2.1%). As of June 2024, there were approximately 1.25 job openings per unemployed individual.

The industries responsible for the most job growth in July, the latest month for which data is available as of the date of publication, include health care (+55,000 jobs), construction (+25,000), and transportation and warehousing (+14,000). Jobs in the information sector, however, decreased by 20,000 jobs the same month.

While the labor force participation rate has remained relatively steady, there has been a consistent rise in labor force participation of “prime age” workers, or those ages 25 to 54. In July 2024, 84% of this cohort was participating in the labor force, the highest level since June 2000.

Source: U.S. Bureau of Labor Statistics

Despite this increase in labor force participation of prime age workers, the U.S. Chamber of Commerce reports there are approximately 1.7 million workers missing from the post-pandemic workforce. Moreover, the Conference Board states that approximately 38% of small firms reported they are unable to fill open positions.

There are several possible reasons for the apparent inability to find workers to fill available positions. Following the pandemic, some workers switched gears career-wise to prioritize work-life balance, including by moving to part-time work or holding out for jobs that have a remote-work option. Many older workers opted to retire during this time. In addition, a number of open positions require a high level of skills/education that appear to be in short supply. At the same time, it remains difficult for employers to obtain the necessary work authorization visas for non-U.S. workers due to stagnant visa caps and regulatory changes, among other factors. These considerations, combined with certain jobs that are increasingly affected by automation and artificial intelligence, indicate a need for educating and increasing the skills of the current labor force. In the meantime, many employers continue to contend with staffing shortages.¹

2.  AI is accelerating workforce transformation

AI is accelerating workforce transformation by automating tasks, enhancing decision-making, and reshaping job roles across industries. AI-powered technologies enable businesses to streamline operations, optimize productivity, and deliver personalized experiences at scale, leading to significant shifts in how work is performed. Routine and repetitive tasks, such as data entry and customer service, are increasingly being handled by AI systems. Moreover, AI is fostering new career opportunities in fields like data science, machine learning, and AI ethics, while also necessitating the reskilling of workers to adapt to emerging technologies. This rapid transformation is fundamentally changing the nature of work, leading to both opportunities and challenges for the global workforce.

The risk of AI being used to displace workers has led to widespread regulatory responses across the federal and state governments to implement greater oversight, prevent the misuse of AI, and protect jobs. At the federal level, numerous executive orders and congressional acts to regulate or guide AI use and development have been proposed, including the Algorithmic Accountability Act.

On October 30, 2023, President Biden issued an “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” to address the growing concerns surrounding the use of AI. The order not only calls on federal agencies to work collaboratively, provide more guidance, and conduct training, but it also urges agencies to develop principles and best practices to mitigate the harms and maximize the benefits of AI for workers.

The executive order also reflects the Biden administration’s “whole of government” approach to promote union membership. The fact sheet released before the executive order identifies, consistent with the intent of the National Labor Relations Act, the dangers of increased workplace surveillance, bias, and job displacement and offers supporting “workers’ ability to bargain collectively” as one way to mitigate such risks.

In addition, federal agencies have increasingly become involved with regulating AI within their jurisdictional mandates. For instance, in 2021, the EEOC launched an initiative to ensure that AI tools and other emerging technologies used in employment decision-making comply with the federal anti-discrimination laws that the agency enforces. Other agencies are also in various stages of developing an AI framework. For example, in 2022, the National Labor Relations Board’s general counsel released a memorandum warning employers that using electronic surveillance and automated management technologies presumptively violates employee rights under the NLRA. On May 16, 2024, DOL released a document entitled, “Department of Labor’s Artificial Intelligence and Worker Well-being: Principles for Developers and Employers.” The document outlines several AI principles to provide employers and developers that create and deploy AI with guidance for designing and implementing these emerging technologies in ways that enhance job quality and protect workers’ rights. It is likely that such efforts will continue in the months ahead.

3.  The Biden administration has been a champion of the labor movement

During his 2020 campaign, President Biden repeatedly emphasized his commitment to serving as the most pro-union president in U.S. history. He promised to make increasing unionization a central focus of his administration. True to his word, the Biden administration has adopted a “whole of government” approach, as first introduced above, to engage the federal apparatus to promote union interests.

Through executive orders, inter-agency task forces, inter- and intra-agency agreements, and various agency actions, the administration has coordinated its efforts regarding union membership. This governmental strategy may be viewed by some as raising concerns that it undermines a cornerstone of U.S. labor law, which takes the approach that the decision to unionize should rest with individual employees, free from government influence. Others may view this approach completely differently and see it as supporting individual employee choice.

The administration’s approach has been primarily driven by executive actions. Notable among these are the creation of the Task Force on Worker Organizing and Empowerment and the directive to use the federal government's “full authority” to promote policies encouraging worker organizing. These executive orders have led federal agencies to push for projects that promote union membership, often requiring businesses applying for government funding to comply with union demands. Agreements between and within agencies further bolster the administration's efforts by enhancing coordination on enforcement, investigations, and outreach aimed at advancing union goals.

In addition to executive actions, federal agencies like the NLRB, the Federal Trade Commission (FTC), and the DOL have been instrumental in supporting this whole-of-government approach. The NLRB, under President Biden’s leadership, has overturned precedents protecting employer interests. President Biden has renominated Board Chair Lauren McFerran to serve a third term, which will establish a Democratic majority on the Board until August 2026. The FTC has explored regulating the gig economy and banning non-compete agreements, both key union priorities. Meanwhile, the DOL promotes the “union advantage” on its website. Congressional efforts have also played a role, with the administration pushing for legislation like the Protecting the Right to Organize Act and increased funding for union-related initiatives. Ultimately, the whole-of-government strategy represents an effort to leverage the full power of the federal government to advance unionization beyond the traditional scope of labor law.

4.  As union membership falls, union activity is on the rise

Divergent trends are sweeping the labor movement. While union membership continues to decline, union influence is on the rise. Last year saw more elections, more strikes, and more unfair labor practice charges. And those numbers show no sign of slowing. They suggest that even as unions become less common, they are growing more forceful.

Since the 1950s, union rates have fallen steadily. While unions once represented about one in three private-sector workers, they now represent only six percent—just over one-sixth of their mid-century peak. Their decline has been driven in part by changes in the workforce. As the U.S. economy has shifted from manufacturing to services, it has created many new jobs in the service sector. These new jobs have clustered in tech-driven industries with no history or culture of unionization. They are therefore harder to organize, which makes them poor candidates to help unions reverse their decline.

At the same time, unions have become more active at the National Labor Relations Board. In the first half of 2024, the Board processed 1,618 election petitions, up 35% from last year. It also received 10,278 unfair labor practice charges, up 7%. And many of those charges involved new, emerging issues, such as noncompete agreements, worker classification, and AI-powered surveillance.

Source: NLRB.gov

Strikes have also continued to rise. In 2023, unions organized 345 strikes affecting almost 460,000 workers, a year-over-year increase of 280%. And while those numbers were inflated by Hollywood and autoworker strikes, there is no reason to think the overall trend will slow in 2024-2025. A union of nearly 50,000 graduate-student workers struck in California. Other major strikes have also been held or threatened in the higher education, healthcare and services sectors. So even if the total numbers fall in 2024, the trendlines will likely continue toward more strikes.

These trends are pulling unions in different directions. Even as they represent a smaller slice of the American workforce, they are aggressively leveraging their strength. The labor movement may be smaller than ever, but it is increasingly activist.

5.  Unions are making inroads in the health and safety sphere

The Occupational Safety and Health Administration (OSHA)’s rulemaking efforts are paving the way for union and employee engagement in developing safety protocols and plans.

Assistant Secretary of Labor Doug Parker has continued to pursue regulatory changes, increasing resources, and ramping-up enforcement efforts both nationwide and in certain areas. OSHA’s far-reaching regulatory proposals display a pro-unionization pattern.

OSHA has proposed several different regulations in 2024, including the worker walkaround rule, the hazard communication standard to better protect workers and first responders, and the heat illness prevention rule. On its regulatory agenda, the agency is also working on finalizing a COVID-19 healthcare rule, infectious disease standard, tree care operations proposed rule, process safety management rule, and workplace violence rule for healthcare workers.

Most of the new rules proposed by OSHA include a requirement for the involvement of employees and unions in the development of plans and training. For instance, in the new proposed heat regulation, the standard specifically requires employers to seek input and involvement of non-managerial employees and their representatives when evaluating the worksite to identify work areas where there is a reasonable expectation of exposures at or above the initial heat trigger, and also in developing and updating monitoring plans for each work area to determine when employees are exposed to heat at or above the initial or high heat triggers.

The worker walkaround rule allows an inspector to permit a non-employee, third-party representative to join the inspection if the third-party representative will aid the inspector in conducting “an effective and thorough physical inspection of the workplace” by virtue of their knowledge, skills, or experience. Employers have expressed concerns that inspectors will bring union representatives or competitors as a third-party representative, potentially expanding unionizing efforts in workplaces.

Based on the Labor Action Tracker run by Cornell University and the University of Illinois, from January 21, 2021 to August 20, 2024, there were over 760 labor actions including strikes and labor protests related to health and safety demands. Since the October 31, 2023 release of the NLRB and OSHA’s Memorandum of Understanding (MOU), there have been over 170 such actions. The MOU seeks to enable the NLRB and OSHA to “closely collaborate” by more broadly sharing information, conducting cross-training, partnering on investigative efforts and enforcing anti-retaliation provisions. This MOU is in keeping with other administration inter-agency enforcement efforts.

6.  U.S. Supreme Court upends administrative law and, perhaps, labor and employment law along with it

The U.S. Supreme Court had a busy term in 2024. The Court decided four major administrative-law decisions that could transform all aspects of federal law, including labor and employment law. These decisions will make rulemaking more difficult, litigation more likely and substantially increase uncertainty regarding the relevant legal issues. They may also push agencies to find new ways to create policy.

In Loper Bright Enterprises v. Raimondo, the Supreme Court held that judges cannot defer to administrative agencies on questions of law. Instead, judges must exercise their “independent judgment” and interpret statutes according to their “best meaning.” What those standards will mean in practice is not yet clear; lower courts are already taking different approaches. But at minimum, courts will now review agency interpretations more closely.

In Securities and Exchange Commission v. Jarkesy, the Court held that the SEC could not impose civil penalties for securities fraud through an in-house administrative process. The Court reasoned that fraud was a “common law” action, and civil penalties were a “common law” remedy. So a defendant facing that kind of penalty had a right to a jury trial under the Seventh Amendment, which guarantees a jury trial for all “actions at common law.” The decision’s holding was narrow, but its reasoning was broad—it could affect other agencies that adjudicate their own claims, including the DOL and NLRB.

In Ohio v. Environmental Protection Agency, the Court struck down the EPA’s “good neighbor” plan. The Court held that the plan violated the Administrative Procedure Act (APA) because the agency failed to address important issues raised during the public-comment process. The Court explained that an agency cannot ignore any major issue raised by commenters. If it does, it acts “arbitrarily and capriciously” and cannot enforce the resulting rule.

Finally, in Corner Post, Inc. v. Board of Governors of the Federal Reserve, the Court held that the APA’s statute of limitations starts to run when a plaintiff is first injured by a rule, not when the rule is first adopted. The APA generally gives plaintiffs six years to challenge a rule. Because of the Court’s decision, the six-year window will start to run again every time a new business is harmed by a rule. And that means the window for challenging rules is wider and, potentially, never-ending. New businesses are started every day, and each one of them is a potential APA plaintiff, further increasing uncertainty regarding the state of regulatory positions.

Together, the decisions will limit agencies’ discretion and place burdens on the judicial system. Agencies will have less leeway to interpret the statutes they administer when making policy. That result may be felt more in labor and employment law, where federal agencies have been active rule makers in recent years. They have adopted major regulations on overtime, worker classification, joint employment, pregnancy accommodation, safety inspections, and noncompete agreements. These rules have all been challenged in court, which are already taking the Supreme Court’s new standards into account. At minimum, those standards will make the rules harder to defend and leave employers with little certainty as to what rules will be applicable.

7.  Immigration challenges continue to impact hiring

Given the upcoming election and possible change in administration—whether under a continued Democratic or a flip to a Republican administration—U.S. employers with foreign nationals in their workforce should remain alert on the progress of various pending reforms affecting work visa categories. Among these pending reforms, the ones that would impact the business community the most are the rules on H-1B visas for “highly educated” foreign workers in “specialty occupations,” and H-2B visas for temporary non-agricultural workers.

As of now, the second half of the final H-1B Modernization Rule, which has been in the regulatory pipeline since last year, is expected to be published in December 2024. The first half of this rule, which took effect in March 2024, brought significant changes to the H-1B registration selection process, making it more beneficiary-centric, thus reducing the possibility of misuse and fraud. The implementation of the second half of the rule will bring about significant modifications to the adjudication of H-1B petitions. Most consequential will be the clarification of the regulatory definition of “specialty occupation” where a range of degrees may be accepted as a qualifying field as long as there is a direct relationship between the required degree and the duties to be performed for the employer. This “direct relationship” is an added element of proof, which may have a negative impact on employers wishing to hire workers under the H-1B visa process. The tech sector has evolved in almost all industries and employers may consider talent from various backgrounds to meet their specific needs. Having the burden of establishing a “direct relationship” will create an unnecessary hurdle, likely resulting in hiring delays.

Other proposed changes include the automatic extension of the “duration of status,” “post-completion optional practical training,” and the “STEM 24-month optional practical training,” as applicable until April 1 of the relevant fiscal year for which the H-1B is requested. The latter is designed to avoid disruption and provide flexibility to those employers that employ F-1 students while their H-1B cap petition is pending. Despite certain provisions, overall, the second half of the Modernization Rule proposes to improve and streamline eligibility requirements, improve program efficiency, and provide greater benefits and flexibilities for employers and workers.

Meanwhile, an unwelcome development came from the H-2B temporary non-agricultural worker sector where additional visas beyond the annual established quota of 66,000 will no longer be issued. This is a setback for U.S. employers that rely on this non-immigrant visa category to temporarily hire non-immigrants from certain designated countries to perform nonagricultural labor or services in the United States when facing labor shortages in mostly seasonal jobs or peak-time jobs. The H-2B visa has an annual numerical limit or “cap” of 66,000 that is established by law. Over the past few years, this cap has been supplemented with additional visas by Congress and the executive branch on a year-by-year basis. Earlier this year, however, the House Rules Committee limited the discretionary authority of the executive branch to issue the additional visa numbers, leaving employers to grapple with the 66,000 annual quota to meet their seasonal and temporary workforce needs for the fiscal year 2025-2026. With no additional visa numbers available beyond the established quota, employers must exercise diligence in starting the process early and be mindful of the visa numbers given its first-in, first-available procedure.

On a brighter note in the H-2B category, the Department of Homeland Security published a Notice of Proposed Rule-Making (NPRM) in September 2023 that proposes to modernize and improve the program by providing greater flexibility and protections for participating workers and improving the program’s efficiency. The NPRM also proposes to extend the grace periods for seeking new employment, preparing for departure from the United States or seeking a change of immigration status. It is expected that the final rule will be published by April 2025.

With respect to the U.S. consular operations for visa issuance, the Department of State announced its plan to expand the “pilot program” of the state-side visa renewal later this year. Although termed as a “pilot program,” this process of renewing visas from within the United States was in effect in the 1990s through the early 2000s but was later discontinued in 2004 because of requirements resulting from the passage of the Enhanced Border Security and Visa Entry Reform Act, including the requirement for biometric fingerprints. In January 2024, the Department of State implemented the pilot program, which ended in April 2024. Due to its success, the plan will continue to expand the program to include dependents and other possible categories. Both employers and foreign workers will benefit from this expansion as it will serve to reduce operational disruptions for companies resulting from the departure of employees for the purpose of obtaining visas. It will also provide relief for employees from the uncertainty and delay on the part of the U.S. consulates to issue visas required for re-entry to the United States.

A number of other immigration-related rules are in development, but given this is an election year there are many other priorities that the current administration appears to be focusing on. For example, in the world of I-9 compliance audits, after a period from March 2020 to spring of 2022, when virtually no U.S. Immigration and Customs Enforcement (ICE) I-9 audits/Notices of Inspection occurred due to COVID-19, ICE has been gradually increasing these audits. In the current fiscal year, we have been advised there were 300 ICE I-9 compliance audits. As a point of comparison, prior to the pandemic, in the 2019-2020 fiscal year, approximately 6,000 I-9 audits were conducted.

Whatever the priorities are of each administration, employers must be aware of the potential cost in penalties if their Form I-9s have substantive errors and take preventive steps within the organization to mitigate risks. Employers are encouraged to take steps to prepare for and communicate with its workforce and stakeholders about potential changes to be able to continue supporting their foreign talent amid the pending uncertainty.

8.  Employers grapple with diversity hiring and initiatives

On June 29, 2023, in the case of Students for Fair Admission v. President and Fellows of Harvard College, the U.S. Supreme Court ruled that race-conscious admissions practices at Harvard College (and in a companion case decided the same day regarding the University of North Carolina), which are generally similar to how other higher education institutions around the country have considered an individual’s race in the college admissions process, violate the Fourteenth Amendment’s Equal Protection Clause of the U.S. Constitution. The Court did not explicitly overturn its two-decades’-old precedent finding that a narrow consideration of race among other factors in the admissions process could pass “strict scrutiny” constitutional muster. But for all practical purposes, the Court’s ruling effectively makes unlawful any ongoing direct consideration of a college applicant’s race in achieving student diversity in higher education.

Although the Court’s decision is limited to the universe of college admissions, federal, state, and local government contractors subject to affirmative action requirements, employers with voluntary inclusion, equity, and diversity (IE&D) initiatives in place continue to have questions regarding the impact of the Court’s holdings on their continuing obligations and IE&D programs.

In the immediate aftermath of the decision, Equal Employment Opportunity Commission (EEOC) Chair Charlotte A. Burrows issued a statement expressing her view that “the decision … does not address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background. It remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” This follows on the agency’s last significant policy statement on the consideration of race in employment, issued in 2006, which stated, “Title VII permits diversity efforts designed to open up opportunities to everyone.” “The Commission encourages voluntary affirmative action and diversity efforts to improve opportunities for racial minorities in order to carry out the Congressional intent embodied in Title VII.” (citing 29 CFR 1608). Even then, however, the agency cautioned “that very careful implementation of affirmative action and diversity programs is recommended to avoid the potential for running afoul of the law.”

At the same time, the EEOC has set forth positions supporting IE&D initiatives through, for example, filing of amicus curiae (friend of the court) briefs in court cases raising these issues. For example, in an appeal pending in the Seventh Circuit, the agency expressed its view that “implicit” or “unconscious” bias training does not per se violate Title VII, while recognizing that some trainings may cross that line. Similarly, in a separate case involving a grant program for which only small, Black-owned businesses were eligible, the EEOC argued that the Supreme Court has allowed voluntary affirmative action plans to remedy manifest imbalances of race in their workforce (the case was dismissed on procedural grounds and is now on appeal to the Sixth Circuit).

Indeed, the EEOC Chair’s statement in the wake of Harvard and the Commission’s amicus briefs notwithstanding, we are aware that the agency has issued at least one “Commissioner’s Charge” relating to IE&D efforts at a Fortune 100 employer. A “Commissioner’s Charge,” authorized under Title VII of the Civil Rights Act of 1964, allows any EEOC Commissioner to direct the agency to investigate allegations of discrimination, even where no individual charging party has come forward and may not be representative of anything other than that individual EEOC Commissioner’s views.

Equally important, there has been no shortage of advocacy groups and others calling for the EEOC to investigate certain practices of companies’ IE&D initiatives.

Cases raising challenges to targeted grant programs that limit eligibility only to certain race, gender, or other protected characteristics have found footing in the courts. In July, the U.S. District Court for the Northern District of Texas found that a grant program that limited awards to only certain classes of individuals was likely to violate Section 1981 and enjoined it on a preliminary basis. See American Alliance for Equal Rights v. Founders First Development Corp., 2024 WL 3625684 (N.D. Texas July 31, 2024). This follows on the heels of an Eleventh Circuit appeal decided in June, in which the court similarly found that a grant program limited to Black, women-owned investment firms was likely to violate Section 1981. See American Alliance for Equal Rights v. Fearless Fund Management, LLC, 103 F.4th 765 (11th Cir. 2024). There have also been several new lawsuits filed against employers challenging IE&D efforts or similar attempts to “improve” racial, ethnic, and gender balance in the workplace.

Despite the rise in IE&D litigation, many employers have opted to maintain or expand their initiatives. In January of this year, Littler released its Inclusion, Equity and Diversity C-Suite Report, in which the firm surveyed more than 300 C-suite executives across the United States regarding their company’s engagement with IE&D initiatives and their plans for the future. The majority of the executives surveyed (57%) say their organizations have expanded their IE&D commitments and level of activity over the past year, even while nearly the same proportion (59%) believe backlash toward corporate diversity programs has increased since the U.S. Supreme Court’s decisions to roll back affirmative action college admissions policies in June 2023. More than a third of organizations (36%) have maintained their IE&D efforts, while just 1% reported a significant decrease.

Since the Harvard decision, the legal landscape with regard to IE&D has become increasingly complicated. Certain practices within IE&D programs will likely continue to be challenged, with the nature of such challenges potentially depending on the outcome of the upcoming presidential election.

9.  State and localities remain the drivers of employment law change

Democrats in Congress have introduced the Fair Wage Act, which would increase the federal minimum wage; the Protected Time Off Act, which would entitle employees to up to 80 hours of paid time off per year; the CROWN Act, which would prohibit discrimination on the basis of a person’s hair texture or hairstyle; and the Restoring Justice for Workers Act, which would restrict the use of mandatory arbitration agreements. Congressional Republicans have introduced the Workers’ Choice Act, which would permit workers who opt out of a union in a right-to-work state represent themselves and negotiate independently with their employers; the Protecting Workers from Coercion Act, which would amend the National Labor Relations Act to require secret ballot elections; and the Mandatory E-Verify Act, which would require all employers to utilize the E-Verify employment eligibility verification system.

Despite efforts on both sides of the aisle to pass laws that would influence employer-employee relations, none of the above-mentioned federal legislation is likely to gain traction and pass given the slim majorities in the House and Senate. Due to the lack of action at the federal level, state governments with trifectas—those in which one political party holds the governorship and majorities in both chambers of the state legislature—have served as the vanguard for passing employment-related legislation that represents the majorities in their respective states. As a result of the 2023 elections, there were 40 trifectas across the country—more trifectas than at any other point from 1992 to 2022. Since last year’s Labor Day, over 275 bills that regulate labor and employment have been enacted at the state level, many of those in trifecta states.

Democratic trifecta states dominate the field in enacting employment-related legislation. California enacted the first-of-its-kind $25/hour minimum wage for health care workers, which has since been delayed due to the state’s budget deficit. On April 1, a $20/hour minimum wage took effect for fast food workers. The same bill establishing the $20/hour wage also created a fast-food council, which has been engaging in what may be viewed as a form of sectoral bargaining. The state also imposed significant additional restrictions on the use of noncompetition agreements and overhauled its unique Private Attorneys General Act to streamline the PAGA litigation process and prevent a PAGA-related initiative from reaching the voters in the general election in November.

Colorado enacted the first comprehensive state-level law to regulate how an employer may use AI in making hiring- and personnel-related decisions. Connecticut expanded its paid sick leave law to cover all private sector employers. The District of Columbia, Maryland, Massachusetts, Minnesota, and Vermont enacted pay transparency laws. Illinois reformed the Biometric Information Privacy Act to reduce employers’ potential exposure under the law. The state also amended its Human Rights Act to prohibit discrimination on the basis of an employee’s reproductive health decisions and to prohibit the use of AI tools that results in biased employment decisions. Illinois also repealed and replaced its child labor laws, strengthening the protections for minors under age 16 in terms of the types of work they may perform and the work schedules that they may keep. New York became the first state to mandate a separate entitlement for paid leave for prenatal care. Hawaii, Illinois, Minnesota, New York, and Washington enacted “captive audience” laws that prohibit an employer from retaliating against an employee for declining to attend or participate in an employer-sponsored meeting or communication about religious or political matters.

States that Enacted the Most Labor & Employment Laws Since Last Labor Day

Not to be outdone, Republican trifecta states have also enacted employment-related legislation in the past year, although with a much different focus. Several loosened child labor regulations, including Arkansas, Alabama, Florida, Indiana, Iowa, Louisiana, Nebraska, and Utah. The Women’s Bill of Rights, which establishes definitions for “sex” and “female” for purposes of all state laws including fair employment practices laws, also experienced momentum in the last year in several states, including Oklahoma, Mississippi, and West Virginia. Utah pioneered a stand-alone religious accommodation law that prohibits employers from compelling an employee to engage in “religiously objectionable expression.” Alabama, taking a cue from Tennessee’s 2023 legislative session, enacted a law that conditions employer eligibility for economic development incentives on the employer’s conduct relative to its employees and labor organizations. Specifically, the law favors secret ballot union elections versus card checks.

Forecast 2024

It is clear that a state government trifecta has an outsized influence on a state’s relative level of employer- or worker-friendliness. Employers should take note that in this year’s general election, some state trifectas are vulnerable, including Oregon, New Hampshire, and Texas. In the event that state-level elections result in a new trifecta, or create a divided government out of what was once a trifecta, employers must be prepared for a change in the state laws regulating employment.

State Political Trifectas

Source: Ballotpedia.com

10. The November general election creates uncertainty regardless of the outcome

Adding to the volatility this Labor Day is the looming general election. This election cycle has been more tumultuous and unpredictable than most. If Kamala Harris wins, it is unclear whether her administration will continue President Biden’s policies, or deviate from certain initiatives, particularly when it comes to labor and employment. Minnesota Governor Tim Walz, her running mate, has signed significant employment legislation into law over the course of his term.

By contrast, if Donald Trump returns to office, the question is not simply whether his administration will reverse course on workplace regulation, but by how much and how soon.

While the focus remains on the presidential election, employers are advised to keep an eye on congressional elections as well. Unless the political composition of the 119th Congress aligns with that of the future president, divided government will remain the norm. If the past is our guide, under this scenario, aggressive congressional oversight is certain and policy will be achieved principally through regulations given congressional gridlock. 

Regardless of who is in the White House and the ultimate composition of Congress, states and localities likely will continue to be the drivers of employment law changes across the nation.

In the meantime, members of the C-Suite may be faced with the difficult task of managing divisive political and social beliefs in the workplace in the lead-up to the election. Executives will need to be mindful of limitations that could trigger NLRA violations or lead to discrimination, harassment, or retaliation claims, for example. There are many steps employers can and cannot take regarding the regulation of political speech in the office, some of which are state-law dependent.  Acting before tensions build is advisable, particularly during this election cycle.

Stay tuned for WPI’s Post-Election Day Report, which will discuss what employers can expect in 2025.