Must-know workforce compliance trends for HR leaders

According to Dayforce research, nearly half (48%) of surveyed leaders believe that increased compliance and regulatory complexity will impede their organisation’s ability to achieve its business objectives. This could be due in part to the sheer number of emerging workforce compliance trends and how many different areas they impact. 

This shift requires substantially more oversight than the compliance function needed in the past. To help simplify the situation, I’ve rounded up key workforce compliance trends that should be top of mind for HR professionals for the remainder of this year and into 2025.  

Non-compete agreements 

In certain nations, including Malaysia and Mexico, most post-termination non-compete agreements have generally been prohibited for some time. Then, in the spring of this year, the U.S. Federal Trade Commission published a final rule that would effectively ban all non-compete agreements between employers and workers. The exceptions to the rule pertain to existing agreements with senior executives, sale-of-business non-competes, and causes of action that accrue before the rule’s effective date of September 4, 2024. However, as of the date of this publication, several current lawsuits are seeking a temporary stay of the rule’s effective date, and one federal court has blocked the rule nationwide.  

Expanded leave requirements 

Globally, the parameters of paid and unpaid leave are constantly in flux. Most interesting is the increase in laws that allow employees to take paid time off (PTO) for any reason. Generous accommodations for new parents and senior caregivers are also becoming an expectation for employers of a certain size. Just this spring in Japan, Parliament passed legislation requiring companies to offer flexible working options to employees with young children to help them balance work with child rearing. 

Minimum pay thresholds 

In the U.S., the beginning of 2024 was marked by an increase in the minimum wage in more than 20 states, and more changes are occurring in individual states and localities as the year progresses. Canada continues to raise its minimum wage every year, while European countries continue to realize the effects of 2022’s Minimum Wage Directive, which took aim at in-work poverty. If you have employees in the U.S., you should note that in April, the U.S. Department of Labor (DOL) issued a rule updating overtime pay requirements. This rule increases the minimum salary threshold for employees to be exempt from overtime pay, with the first phase having taken effect on July 1st of this year and the second phase taking effect on January 1, 2025. 

Increased pay transparency  

From the United Kingdom and Canada to Japan and Australia, governments are starting to become more involved in pay transparency, which may include laws that require private sector employers to disclose the pay range for a position to applicants. Most organisations drag their feet on pay transparency until it’s required, because when it comes to issues of equity and fairness, this type of disclosure can open up the proverbial can of worms. Nevertheless, compliance-minded organisations should prepare for pay transparency to become universal in the next few years. 

Social media monitoring and access 

In 2024, an increasing number of governments prohibit employers from accessing the personal social media accounts of job applicants or current employees. Countries such as Brazil take a dim view on employee social media monitoring, believing that social media generally contains personal data and opinions that should be off limits to employers. And in many U.S. states, employers can no longer request login information or copy/reproduce information gleaned from personal social media accounts.  

Employee misclassification  

With the rise of the global contract workforce comes a great deal of confusion about whether to classify workers as full-time employees or contractors. Obviously, misclassifying employees in a deliberate attempt to reduce labour costs will get you into legal trouble in many jurisdictions, but so will having the same expectations of your contract workers as your full-time employees. Along with other countries, the United Kingdom recently introduced IR35 legislation, aiming to prevent the misclassification of employees as contractors – for the purpose of tax avoidance – by both the worker and the firm hiring them. 

Unionisation 

I’ve been writing about unionisation a lot more the last few years, and it’s a trend that’s hard to ignore. In many countries, labour laws dictate that leaders must not interfere with employees’ right to organize and collectively bargain for terms and conditions of employment. If you do business in these nations and your employees form or join a union, your organisation could be subject to severe penalties if leaders actively question them about union membership or retaliate against workers who protest unfair labor practices. I should note that unionisation and collective bargaining aren’t universally accepted realities. Countries such as the United Arab Emirates do not currently recognize the right of employees to organise to form unions.  

Workplace harassment 

In the U.S., the Equal Employment Opportunity Commission has updated its enforcement guidance on workplace harassment for the first time in over 20 years. The updated document calls out protections for LGBTQ+ and pregnant workers, and guards against the virtual harassment of remote workers. Other countries have been following suit, including Australia, where a Human Rights Commission is cracking down on employers who fail to actively prevent workplace sexual harassment. 

Employee data and AI protections  

In the U.S., organisations must ensure they comply with a host of applicable data privacy regulations including for example, the Health Insurance Portability and Accountability Act (HIPAA), the California Consumer Privacy Act (CCPA), and the European Union’s General Data Protection Regulation (GDPR). They must also be transparent in their communication with employees regarding the usage and storage of collected data. The ethical use of AI in the workplace is also a hot-button issue for global governments, but countries, regions, and localities are progressing with legislation at a varied pace. Their regulations also have different emphases. In an article explaining that the EU’s rules on artificial intelligence will be enforced in the summer of 2024, Reuters writers Foo Yun Chee and Tassilo Hummel commented that the EU’s AI Act is more comprehensive than the United States' light-touch voluntary compliance approach while China's approach aims to maintain social stability and state control. 

Regardless of where your organisation and employees are located, it’s critical to monitor your jurisdiction’s HR compliance-related news on a weekly or monthly basis through trusted government, legal, and HR sources. HR leaders may need to pivot their plans and processes to account for local developments and to consider the interplay of regulations affecting the various geographies in which you have employees.  

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.