It can always be a challenge for company leaders to integrate new employment laws and regulations into businesses. This year in particular, three new laws go into effect either federally or in certain jurisdictions that could have a major impact on how employers conduct business. While the intention of these new laws and regulations is to make the workplace a more equitable place for employees, some companies may find them challenging to carry out. The three main areas of concern are: the proposed ban on noncompete clauses in employment contracts, pay transparency legislation, and new human capital disclosures. HBR has published a great new summary, with advice on how to maintain a growth mindset around these changes.
The first is a proposal from the Federal Trade Commission that would ban non-compete clauses in employment contracts. The thinking behind this ban is that these clauses are unfair to workers that are prevented from pursuing new opportunities, and also to employers who are unable to hire valuable those who have these agreements with other companies. While this is not in effect just yet, once it does pass, companies will have 180 days to comply with the new regulation.
The second law only applies to certain states and/or municipalities, and concerns pay transparency in the hiring process. Under this law, companies must list salaries for both external hires and internal promotions. One of the goals of this law is to close the gender wage gap, but it can also greatly benefit employees at the bargaining table if they are able to see competitors’ salaries. To see if these laws impact your company check out the full article here.
The third and perhaps least far-reaching proposed regulation comes from the SEC and concerns rules on human capital. Once in effect, this would require publicly traded companies to disclose expenditures on skills training and development, workforce composition, turnover, diversity, compensation, and benefits. Ultimately the SEC is trying to help investors understand the abstract idea of human capital a bit better, so that they may make better informed decisions. This is a great summary of what is currently required or will be quite soon. Give it a read and see how your company can use this information to more easily adapt to these changes.