As the world recovers from the pandemic and grapples with the consequences of the war in Ukraine, many countries are experiencing a labor shortage. To encourage full participation of the working-age population, governments are attempting to tackle flaws in the employment market and manage the risks involved in increasing digitalization.
As a result, trends in the passage of legislation in 2023 will include:
- Pay transparency measures.
- Paid leaves and flexible working.
- Protection for nontraditional workers.
- Tightening restrictions against temporary work.
- Whistleblowing and modern slavery protections.
- Artificial intelligence and privacy regulation.
Pay transparency measures. Despite more than 50 years of equal pay legislation, the gender pay gap, which stands at an average of 20% worldwide according to the United Nations, persists. Multiple countries — including Canada, Chile, France, Germany, Iceland, Lithuania, the UK and the US — already have transparency legislation or policies in place. However, federal, national and local governments are in the process of enacting measures [1], including the European Union, which is currently approving a Pay Transparency Directive.
In the US, the move to address the gender pay gap started with salary history bans, and to date 28 states plus the District of Columbia and Puerto Rico have passed such laws. Ten states have passed laws requiring employers to be transparent about their pay gap with mandatory reporting and disclosure of salary information, and several more have plans to do the same.
Paid leaves and flexible working. Last year, many countries across the globe tightened up or introduced rules on remote working. The pandemic also exposed a harsh reality for many workers who are prevented from working due to illness. While US employees are covered for long-term leave under the Family and Medical Leave Act, there’s no federal paid sick leave act that requires a private employer to pay for short-term illness. Consequently, a growing number of local lawmakers are providing safety nets. Private employers in more than a dozen states, plus two dozen municipalities across the US, are now required to provide some form of paid sick leave to eligible employees.
In the UK, private members’ bills currently going through Parliament also provide leave for bereavement and caregivers and a right for individuals to request a pattern of flexible working from day one of employment.
Other jurisdictions provide a plethora of paid and unpaid leaves for life’s eventualities — notably Canada, which provides employees time off for reasons as varied as domestic violence, the bereavement and disappearance of a child and for traditional Aboriginal practices. Victoria in Australia even piloted sick pay for casual and self-employed workers [2].
Protection for non-traditional workers. China, Chile, Mexico and Belgium are just some of the countries that have proposed laws to classify platform gig workers as employees or provide equivalent rights. The European Parliament reached a deal on the platform workers’ directive, pending confirmation by the Employment and Social Affairs Committee on Dec. 12, 2022.
Tightening restrictions against temporary work. Countries in Europe with inflexible dismissal procedures have seen a rise in the use of temporary workers to cover core activities. Norway, Sweden and Spain have sought to make the long-term use of agency workers and fixed-term contract employees less attractive. The Netherlands has discouraged the direct sourcing of temporary workers and is set to introduce licensing to curb the worst practices of rogue staffing firms.
In the US, Pennsylvania, Connecticut, Iowa, Illinois, Louisiana, Ohio and Oregon have introduced registration schemes for healthcare staffing agencies. Additionally, the House and Senate introduced companion bills titled the “Travel Nursing Agency Transparency Study Act,” which would require the Government Accountability Office to conduct a study and issue a report to Congress on the business and payment practices of nurse staffing agencies and the impact of hiring travel nurses across the healthcare field during the Covid-19 pandemic.
Whistleblowing and modern slavery. Estimates of the number of people being exploited worldwide vary, but it is acknowledged as a global issue, and most large companies carry statements on their websites covering modern slavery and whistleblowing alongside anti-bribery policies, fraud, protection of personal information and competition law. However, reputational risk has not proven to be enough of a disincentive, and, in Germany for example, sanctions similar to those introduced by the GDPR — fines of up to 2% of total worldwide annual group turnover for companies with an average worldwide turnover of more than 400 million euros ($432.4 million) — will be introduced with the new Supply Chain Act in 2023.
AI and privacy regulation. The development of machine learning and artificial intelligence has gone into overdrive in recent years. Now, governments around the world at both federal and local levels are attempting to get ahead of the risks that may arise from the exponential growth of AI. Canada, China, the EU, the UK and the African countries of Egypt, Mauritius and Rwanda have either adopted or are in various stages of adopting regulations for the use of AI.
The Algorithmic Accountability Act would require US-based companies to conduct impact assessments on their automated decision-making systems for bias, and the Advancing American AI Act would set US government standards for using AI.
By their nature, laws are slow to change behavior, but aside from tax incentives, which are unrealistic with worldwide debt and mounting inflation, they are the best tool a government has.
For more information on these topics, members of the CWS Council can access the following SIA reports:
- Global Pay Transparency Laws [1]
- Using AI: Risks and Challenges [3]
- Compliance and Legal Research: Quarterly Legal Updates [4]