5 Employment Policies to Review in 2023

Employment laws are often complicated, and every new regulatory development adds to the difficulty of staying compliant. That’s why employers should regularly update employee handbooks to reflect the changes and reduce the risk of legal liability and costly fines.

Pay Transparency

The tight labor market has led employees to make new demands, one of them being pay transparency. This practice, in which pay-related information is openly shared with current and potential employees, has gained a stronger foothold in the past few years. At the start of 2023, 14 states and localities have enacted transparency laws.

As applicable laws related to pay transparency vary based on jurisdiction, employers should consider their legal obligations and update their policies accordingly.

Paid Leave

Though there isn’t a guaranteed federal paid leave, the topic is a hot issue on the federal level. While certain acts, including the Family and Medical Leave Act (FMLA), Uniformed Services Employment and Reemployment Rights Act (USERRA), and Americans with Disabilities Act (ADA) protect certain employees and impact federal regulations, more states and localities are enacting their own paid leave requirements. Each change means employers need to review existing policies and confirm compliance with local laws and any regulations of the locations where their employees physically work.

Related Reading: 3 Things to Consider When Implementing a Parental Leave Policy.

Expense Reimbursement

Federal law requires employers to reimburse employees for work-related expenses that cause their pay to drop below the federal minimum wage. Still, some state and local laws require reimbursement for additional costs, such as office supplies and telephone fees. Employers should review their policies to ensure compliance with the laws and consider updating their employee handbook to outline which expenses are reimbursable and the timing of payments.

Marijuana Use and Testing

As more states are passing laws legalizing the medical and recreational of marijuana, employers need to be aware of how they impact their businesses. While employees must ensure their marijuana use and testing policies comply with regulations of where their employees physically work, state laws that legalize medical or recreational marijuana do not affect employers’ rights to retain zero-tolerance drug and alcohol policies.

Employers who do not employ any workers in states where marijuana is legal can decide whether to screen employees for marijuana and how they will respond to a positive test result.

Remote and Hybrid Work Arrangements

Employers should update their employment policies to address remote and hybrid work arrangements and ensure they comply with privacy laws. These policies should also address:

• Who is eligible for hybrid or remote work
• Which days and core hours employees are expected to work
• What technology is available for employees to use at home

Related Reading: Preventing Cyberattacks on Remote Employees

Regularly reviewing and updating employment policies is an effective way for employers to protect themselves from unnecessary risks. By examining these key policies, employers can take steps to ensure their employment policies are current and reflect the most recent regulatory developments.

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.