3 Upcoming Labor Law Trends Employers Should Watch in 2024

By Angela Preston, Associate General Counsel, Corporate Ethics & Compliance

Starting next year, several regulatory issues are set to impact employers regarding the hiring process, criminal background screening, and use of artificial intelligence (AI) in making hiring decisions. Labor laws have rapidly evolved over the last few years, and many organizations are finding it difficult to keep current with best practices. Employers, together with their hiring and compliance teams, should familiarize themselves with these legal developments to help ensure a compliant hiring and background check process, while also improving the candidate experience.

To help employers identify these legislative trends and inform their policies, here are 3 upcoming labor law trends employers should watch in 2024: 

1. Clean Slate Laws

“Clean slate” legislation continues to be a major labor law trend (at both state and local levels) going into 2024. The goal of these laws is to broaden employment opportunities for first-time offenders of low-level offenses. Clean slate laws are a legislative policy model permitting removal of specific types of criminal records from the public court record. As a result, in some instances, employers can no longer access certain types of records which were previously available during background screening.

Employers in the US might find it daunting to stay informed about these laws since they are enacted not at the federal level, but instead at both the state and local levels. As clean slate laws have gained traction in recent years, employers are re-examining their hiring policies and how clean slate affects making hiring decisions.

Employers should closely consider how they wish to handle information found during a criminal background check, while also identifying types of offenses that could impact employment, given specific job requirements and the possibility of workplace safety and organizational risk. Also, they should consider modifying policies and practices when inquiring about a candidate’s criminal history during the background check process for employment, taking into account whether the law allows them to inquire about criminal history, and at what point in the hiring process an inquiry is allowed. 

2. Fair Chance Laws

“Fair chance” laws are another labor trend to watch in 2024, affecting employers by adding new requirements to the hiring process when considering criminal records. Adding complexity, fair chance laws can also differ by state. As a recent example, employers in California must now conduct preliminary initial assessments of criminal history information prior to beginning the adverse action process on candidates. Californian employers must also give their candidates additional opportunities to respond and provide additional documentation or mitigating information before making a final hiring decision.

While many employers are already informally following fair chance mandates, these new legal requirements should prompt them to revisit their existing policies and practices with their legal counsel, making sure to document their practices to keep a record of compliance. 

3. AI for Use in Employment Decision-Making:  

AI is still a relatively new area of law, but since 2020, laws and federal initiatives concerning the use of AI for employment have developed at a rapid pace. While many employers plan to utilize the productivity gains from AI tools, it has now become crucial for them to stay updated on the latest regulatory and legislative measures (including those from the FTC and the EEOC) set to govern use of AI and automated employment decisions tools (AEDTs). Legislators and regulators — at the federal, state, and local levels — are tightly focusing on employers’ use of AI to make employment decisions, along with the potential for discrimination and bias under Title VII of the Civil Rights Act of 1964. As part of this emphasis, the EEOC is now investigating and enforcing anti-discrimination laws concerning employers’ use of AI decision-making tools.

Crucially, employers lacking an AI employment policy currently have no way to establish or enforce organization-wide practices defining acceptable use of AI and automation. Fortunately, organizations can create and review these policies in light of EEOC guidance and other regulatory updates. This should help ensure they’re using AI technologies and similar tools fairly and consistently in accordance with the federal government’s equal opportunity laws.

As we head into 2024, employers can create sound employment policies and processes through closely monitoring new federal, state, and local legislation concerning labor law trends. By staying ahead of these regulatory developments and leveraging their legal counsel, employers can help to remain compliant, feel confident in their hiring programs, and enhance the candidate experience.

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