As a full-service business law firm, Maddin Hauser works with various employers with a range of perspectives on the futures of their companies, their industries, and the overall economy. How company leaders view 2023 determines how they strategize about the size and make-up of their workforce. Optimists may staff up, while pessimists may brace for downsizing and layoffs.
For the Optimistic Employer
If you see boom times ahead, adding headcount is likely a top priority.
New Hire Background Checks: Hiring and onboarding costs time and money, but it can be much costlier if you hire the wrong person based on misrepresentations or violate the law during the screening process. Employers must undertake a comprehensive background check while avoiding improper and/or illegal inquiries.
Attracting and Retaining Top Talent: A competitive labor market means that employers must step up their game to attract and retain top talent. This includes creative incentive compensation arrangements and benefit packages, a demonstrated commitment to diversity, equity, and inclusion, modern scheduling policies, and a positive company culture.
For the Pessimistic Employer
Conversely, pessimistic employers expecting to shed employees in 2023 have different concerns.
Mass Layoffs: For larger private employers, the federal Worker Adjustment and Retraining Notification (WARN) Act has strict and detailed pre-termination notice requirements designed to give workers a “heads up” about an impending mass layoff so they can prepare for job transitions. Failure to comply with the act’s notice requirements can result in liability and civil penalties. Many states have their own “Mini-WARN Acts” with notice requirements that may differ from the federal WARN Act, so employers must check local laws to ensure they conduct layoffs properly.
Exit Plans and Documentation: Employers must also ensure that their restructuring plans and practices don’t raise disparate treatment and/or discrimination concerns. Employers want to ensure that restructuring plans do not disparately impact individuals in a protected class and that severance arrangements are statutorily enforceable and compliant.
For All Employers
Regardless of their outlooks on 2023, all employers should consider these two issues in the coming year:
Worker Classification: Federal and state governments are enhancing scrutiny of worker classification issues. As such, employers should proactively audit classification issues impacting their workforce. Employers should evaluate whether workers have been properly classified as independent contractors. Additionally, employers should evaluate whether workers have been properly classified as exempt/salaried or non-exempt/hourly employees. A worker’s status is ultimately not up to the employer. Rather, it depends on rules and regulations of the U.S. Department of Labor and the IRS and state and federal laws addressing worker classification. Worker misclassification may be costly to both the company as well as owners and managers, as corporate decision-makers may face potential personal exposure for misclassification.
Updates to Employment Agreements: Employers should review employment agreements to ensure that the agreements are up to date and to verify compliance with state and federal laws. In particular, such agreements should be reviewed for compliance with new laws impacting mandatory arbitration and non-disclosure clauses involving sexual misconduct claims.
Protecting Trade Secrets: Your employment agreements should contain robust confidentiality and non-disclosure provisions to prevent departing employees from taking proprietary information to competitors. You should also implement policies and upgrade systems to keep tight control over customer lists, sensitive business and financial information, and intellectual property.
Whether bullish or bearish about the new year, employers are invited to attend Maddin Hauser’s complimentary monthly employment law educational series, Breakfast Bites®, which will cover numerous topics in 2023.
