A Look at Recent Legislative Trends in HR

Legislative trends in HR can have big implications for employers – affecting the cost of doing business and changing common processes and procedures. This month, we’re taking a closer look at four important trends: pay transparency, paid time off, pregnant worker protections and the minimum wage. Find out what’s happening now and what may lie ahead.

Trend #1: Pay Transparency Becomes the New Norm

On the federal level, the National Labor Relations Act gives employees the right to discuss their wages with coworkers and others. Although employers often don’t want workers to compare their salaries with one another, it is illegal for them to punish or retaliate against workers for doing so.

Now, new state-level pay transparency laws are taking worker rights a step further. These new laws may require employers to provide upfront information about salary ranges and benefits in job advertisements or when asked during the job application process. These laws are intended to help close the gender pay gap and other pay disparities by providing increased transparency. According to Forbes, Colorado kicked off the pay transparency trend with new legislation in 2019, followed by Maryland, Connecticut, Nevada, Rhode Island, Washington, California, New York, Hawaii, Illinois, Minnesota, Vermont, and Washington, D.C. Some local municipalities have passed additional laws.

As pay transparency laws become the norm, job seekers might expect to see this information, regardless of whether it’s required in their location. Multistate companies may also need to provide wage, salary, and benefits information to ensure compliance with all applicable laws.

Trend #2: Paid Time Off Requirements Keep Increasing

Under the Family and Medical Leave Act, covered employees must give eligible employees job-protected time off for certain family and medical reasons. The amount of time required is usually limited to 12 workweeks, although it may be up to 26 workweeks for covered servicemembers. Employers do not need to pay for this time off.

Critics say this isn’t enough, leading some states to pass laws that give workers additional protections. According to CNBC, Alaska, Missouri, and Nebraska voted to pass ballot measures in the 2024 election that would introduce paid sick leave starting in 2025. These three states join 15 states, Washington, D.C., and various local municipalities that already had paid sick leave requirements on the books.

Some states have also been passing paid family and medical leave laws. According to the National Conference of State Legislatures, 13 states have passed legislation that creates requirements for paid family and medical leave: California, Colorado, Connecticut, Delaware, Maine, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington. Washington D.C. has also passed legislation to create mandatory leave. Employee-paid or employer-paid payroll taxes often pay for these programs. New York requires employers to buy private insurance, whereas several other states have created optional paid leave coverage programs, which employers can opt to purchase through private insurers.

Many employers offer disability insurance as an employee benefit. According to the BLS, 40% of employers offer short-term disability insurance and 35% offer long-term disability insurance. As more states require paid time off funded through payroll taxes or require employers to provide insurance, more employees may expect paid time off. To keep up with this rising demand, employers in states that do not yet have any paid leave requirements may want to consider adding disability insurance to their employee benefits package, if they have not done so already.

Trend #3: Pregnant Workers Have More Protections

Alongside the push for more paid time off for family and medical reasons, there has been a call for additional protections for pregnant workers. On the federal level, the Pregnant Workers Fairness Act went into effect in 2023, with a final regulation from the EEOC going into effect on June 18, 2024. Under this law, covered employers must provide reasonable accommodations to qualified employees or applicants who are affected by pregnancy, childbirth, or related medical conditions. Note that other laws already make it illegal to discriminate against employees on the basis of pregnancy, childbirth, or related medical conditions.

According to Business Insurance, there has been a surge in EEOC lawsuits accusing companies of violating the Pregnant Workers Fairness Act. In the first 11 months after the law went into effect, the EEOC received 1,869 complaints of violations, and between September 10 and October 11, 2024, the EEOC filed four federal lawsuits.

At the state level, some lawmakers are focusing on increased rights and paid leave for workers who experience reproductive loss. According to Seyfarth Shaw LLP, Massachusetts has expanded covered sick time reasons to include reproductive loss. California has also introduced new requirements for reproductive loss leave.

Trend #4: The Minimum Wage and Overtime Rule Debate Continues

The minimum wage threshold for overtime has proved divisive over the past decade. According to HR Dive, a rule that would have raised the threshold to $47,476 in 2016 was struck down, but then another rule succeeded in raising the threshold to $35,568 in 2019. More recently, a two-pronged rule that raised the threshold to $43,888 on July 1, 2024, and was set to raise it again to $58,656 on January 1, 2025, has been struck down, returning the threshold to the previous amount of $35,568. An appeal is possible, but given the current political landscape, it is likely that this rule is dead. However, employers that have already implemented raises or reclassifications may want to avoid backtracking to prevent potential legal disputes.

Meanwhile, many states have been raising the minimum wage. According to the National Conference of State Legislatures, 34 states, territories, and districts have minimum wages that are above the federal minimum wage of $7.25 per hour. Several states have introduced annual indexed increases to keep the minimum wage in line with rising costs of living. California also made headlines with a $20 minimum wage specific to fast food workers, which went into effect in April 2024. According to the Shift Project, this was the largest minimum wage increase in recent history.

However, there may be a limit to what voters are willing to accept. NBC News says California voters rejected a ballot measure that would have gradually increased the regular minimum wage to $18 an hour.

Are You Prepared for Legislative Changes?

Evolving legislative trends can create new expectations, requirements and liability exposures for HR teams. They also put the spotlight on worker rights and influence the perceptions of both employees and job seekers.

On the federal level, Republican dominance could bring deregulation in the coming years. However, states may continue to pass additional worker protections.

However, even if your state is not raising the minimum wage, mandating paid time off, or requiring pay transparency in job ads, be mindful of employee perceptions and expectations.

To compete for top talent, it might make sense to adjust your pay and benefits strategy. For example, rounding out your employee benefits package with disability insurance could make your compensation package more appealing without increasing your costs substantially and could help meet employee expectations regarding paid medical leave.

Partner with Altura Benefits to design an employee benefits package that aligns with today’s legislative trends in HR. Contact us today to learn more.