The legal environment in which small businesses operate is set to see significant changes over the next few years. Big-ticket items such as tax reform and healthcare legislation garner most of the attention, but there are several others that could make a significant impact as well. We dived into one of them, the growing legislative efforts around paid time off, in a recent article. And here are three more regulatory developments that are shaping up to be just as important.
New worker protections
Following in the footsteps of other state leaders, California Governor Jerry Brown recently signed several bills intended to provide more protections for job-seekers. The first major highlight is a law that will prohibit businesses from using a candidate’s pay history to determine their salary. Nearly a dozen other states and cities have already passed similar measures. The other, meanwhile, is a ban on asking about criminal history that in turn follows about 150 other similar laws passed over recent years.
The increase in the amount of legal backing extended to workers can be felt beyond the hiring stage as well. Shortly before California’s new bills were signed, Nevada passed legislation requiring businesses to consider pregnant employees for accommodations historically afforded to workers with disabilities.
It’s all part of a nationwide trend that is only set to widen in reach. As a result, even businesses who are not yet affected by such upcoming legislation should start preparing for the day where they may need to modify their HR processes. Implementing such changes can be a time-consuming affair, which it’s best to lay the groundwork early. This is especially true since state-level regulations sometimes conflict with federal legislation and create new compliance challenges in the process.
A regulated gig economy
Another legislative trend with potential long-term significace has to do with the so-called “gig economy”. For the uninitiated, it’s the umbrella term for the part of the job market dedicated to temporary positions and other non-traditional work. It’s estimated that over half of U.S. workers will be freelancing within a decade, a phenomenon that has predictably caught the attention of lawmakers.
New York and Washington are considering legislation aimed at mandating more traditional employee benefits for gig workers. Meanwhile, Virginia Senator Mark Warner has proposed implementing a similar measure at the federal level. Lawmakers are focusing mainly on gig economy giants such as Uber, but their efforts will likely affect smaller employers as well.
Businesses are increasingly relying on freelancers in day-to-day operations. Many restaurants, for example, handle orders with the help of food delivery companies that depend almost exclusively on gig workers. Any changes in the legal status of freelances would consequently require modifying not only hiring procedures but potentially also business strategy. And given the amount of attention that the subject is receiving, those changes are likely a matter of if and not when.
A return to apprenticeships
Gig economy jobs are not the only type of non-traditional work arrangement that is making headlines these days. Acting on an executive order from June, the U.S. Department of Labor (DOL) is currently developing a program designed to foster the use of apprenticeships among businesses. The apprenticeship model is touted as a potential way to address one of the biggest long-term challenges facing the job market.
According to research from Forrester, automation is set to displace tens of millions of jobs in industries such as retail and manufacturing. This will require workers to start obtaining new skills that can help them switch to more in-demand traders. In the present day, however, many of those trades (STEM fields being the most prominent example), suffer from talent shortages that make recruiting difficult.
Apprenticeship programs provide a means for businesses to take matters into their own hands and train workers in needed skills. For job-seekers, meanwhile, the appeal is that they can learn a new trade as part of a paid program which will lead to a full-time position. The DOL’s apprenticeship initiative seeks to make this model more feasible for employers from a regulatory and legal standpoint. The stated goal is to create 5 million new apprenticeships, which would open a valuable source of talent for hard-to-fill positions.