Big changes are in store in 2017. In this article, we’ll examine some current hot topics in HR including the new political landscape and what it could mean for employers, some of the state and municipal regulations on the horizon, the trend of automation, and the importance of attracting talent in an economy favorable to employees.
Political Uncertainty
No one knows for sure what executive and legislative changes will be made over the next four years, but it’s possible that the Affordable Care Act could be repealed or that major modifications could be made to it. The proposed FLSA overtime changes, currently on hold, could be permanently scrapped. The National Labor Relations Board may rule more favorably to employers. And only time will tell if President Trump will revoke any employment-related Executive Orders or issue his own. We’ll have to wait and see how this all plays out.
We recommend employers pay attention to changes that may affect their compliance obligations. We’ll be updating the HR Support Center and sending out eAlerts when these changes occur.
State and Municipal Legislation
Despite political uncertainty at the federal level, there are many compliance changes at the state and local level that employers should be ready for.
The minimum wage just increased in over 20 states and 20 cities across the country. Other states and cities will see increases mid-year. The legalization of medical and recreational marijuana also marches forward at the state level. Voters in Nevada, Florida, and Arkansas approved medical marijuana use, and voters in Massachusetts and California legalized recreational use.
While the new FLSA overtime rule was put on hold, keeping the minimum salary requirement for White Collar Employees at $455 per week, several states have their own requirements. California’s state law, for example, requires that exempt employees make at least twice the state minimum wage on a monthly basis. Consequently, the minimum salary for exempt employees who work for California employers with 26 or more employees increased this year. Alaska also requires a minimum of twice the minimum wage, while New York is poised to implement a new minimum of $825 per week. Some other states require that exempt employee make at least the state minimum wage, which could eventually lead to a minimum exempt employee salary that is higher than the federal threshold, if it remains stagnant at $455 per week.
Automation
On December 20, the White House released a report on artificial intelligence (AI), automation, and the economy. The report predicts that AI will be felt unevenly throughout the economy, eliminating some jobs and creating the need for others. Automatic cars, for example, may decrease the need for drivers, but increase the demand for programmers. Overall, AI could threaten anywhere from 9 to 47 percent of jobs over the next decade or two, a big change likely to hit low-income and low-skill workers the hardest. In response, the White House recommends investing and developing AI, educating and training Americans for the jobs of the future, modernizing the safety-net, expanding unemployment insurance, and empowering workers through a variety of programs.
The full effects of AI on employment won’t be felt for some time, but employers shouldn’t wait to prepare for the future. Even if AI will have little effect on their industries, they may be required to provide additional benefits and protections to their workers.
Attracting Talent
A good economy is good for employers, but it has a downside—the decreased supply of skilled and talented labor. The lower the unemployment rate, the harder it is for businesses to attract and retain talent. To compete for workers, some employers will offer higher wages and more enticing benefits. Employers who can’t afford to spend a lot more money aren’t out of luck, though. While compensation and benefits obviously motivate employees, they’re not the only way to motivate them.
Creating a great workplace culture and developing employees with their career paths in mind are two proven ways to build employee loyalty. Employees want to work at a place they enjoy going to each day, they want to feel like their contributions matter to the success of the organization, and they want to expand their knowledge and improve their skills. Employers who help their employees with these matters and may soon find themselves able to offer competitive salaries and benefits as well.