4 Key Legal Challenges for Employers in 2022

As the Covid-19 pandemic continues to change and evolve, it has forced businesses across the country to do the same. From the battle over vaccine requirements to the shift to remote work, employers have dealt with an incredible number of changes over the past couple of years. And it looks like the new year will be no exception. Here are four key legal challenges employers should consider and prepare for heading into 2022.

Employer Challenge #1:

Establish a workplace Covid strategy and determine how to navigate the uncertain legal landscape.

To protect employees from Covid in the workplace, many employers have considered and implemented vaccine mandates or regular testing requirements. Yet recently, these tools have generated tremendous legal uncertainty in terms of whether they may—or even must—be implemented.

For most of 2021, it appeared to be settled in almost all states that employers could mandate the vaccine as long as they considered exemptions based on disability or religious beliefs. In September, the Biden Administration went a step further by issuing rules mandating the vaccine for employees of federal contractors and Medicare- and Medicaid-receiving entities, subject to disability and religious-belief exemptions. In November, the U.S. Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard mandating vaccination or regular testing by employers with 100 or more employees.

Those rules were immediately challenged in numerous separate lawsuits. As of this writing, each of the three federal mandates has been stayed by one or more federal courts pending further litigation. The legal landscape has seemingly shifted every week—and sometimes nearly every day—as courts across the nation decide the legality of these mandates. Only after much additional litigation, potentially ending in the U.S. Supreme Court, will it be clear whether any of the mandates remain valid legal obligations.

In the meantime, there has been a steady stream of state and local laws—including Gov. Greg Abbott’s GA-40 Executive Order here in Texas—that conflict with the federal mandates by purporting to prohibit employers from requiring the vaccine. These laws, too, will likely be challenged in court. Even Covid testing regimes have created significant legal questions, including whether employers must pay for the tests or for the time spent taking the tests.

To be sure, employers should continue to implement strategies to prevent the spread of Covid in the workplace. But in 2022, they must actively monitor the host of legal questions surrounding their options and proceed with caution.

Employer Challenge #2:

Develop a strategy for dealing with the “Great Resignation” hitting the workplace.

The “Great Resignation” refers to the trend, which began in early 2021, of employees voluntarily leaving their jobs in large and unprecedented numbers, some to move to other industries for better pay and some to drop out of the labor market altogether. Current estimates suggest that there are upwards of 4.3 million “missing workers” compared with pre-pandemic statistics.

Although there are likely a number of reasons underlying the “Great Resignation,” most agree that the Covid-19 pandemic pulled the curtain back on growing dissatisfaction in key labor market fundamentals, including low wages (historically and compared with new employees), lack of paid leave to manage childcare and other personal issues, and inflexible work hours.

Employers who want to “resignation-proof” their business and be competitive in a tight labor market should review their policies in three critical areas:

1. Wages. Compensation for workers is expected to increase by nearly 4 percent in 2022. In order to retain and attract new talent, employers must ensure that they have a market-competitive, total compensation package (base salary, incentives, and benefits). Employees have options in this tight labor market, including the option to migrate to jobs and industries that offer a more desirable compensation structure.

2. Paid leave. Workers report that a flexible paid-leave policy is an effective recruiting and retention tool. Competitive policies should focus not only on how much leave is offered, but how and when it may be used. Even small changes, like front-loading paid leave and/or making paid leave available from the date of hire, can be effective incentives.

3. Work flexibility. The pandemic showed that some workers (really) like remote work and flexible work schedules and that employers can make these polices work, in many cases. Particularly in mid- and upper-management white collar jobs, a remote or hybrid remote work policy may become the norm.

As 2022 begins, employers should consider where their workplace may be vulnerable to the Great Resignation and why. A makeover of the retention and recruiting toolbox may be required.

Employer Challenge #3:

Handle political and social speech in the workplace.

The events of the past several years have created an environment in which an increasing number of employees desire to express themselves in the workplace regarding hot-button political or social issues. Recent examples include disputes regarding whether employees may wear Black Lives Matter or “Thin Blue Line” masks to work. Fearing disruption and discord, employers have been considering their policies regarding which types of speech are, and are not, permitted on the job.

Employers must tread cautiously. First, the law regarding protections for political and social speech in private workplaces is still developing. Some courts have issued opinions rejecting a broad-based legal right of employees to advocate for political and social causes at work; however, these opinions and other precedent recognize that there may be protection for speech that is tied specifically to concerns about discrimination, retaliation, safety, wages, or other terms and conditions of employment. For example, the National Labor Relations Board (NLRB) has recently brought several complaints against companies that banned Black Lives Matter messages on workers’ clothing, on the grounds that the messages constitute protected “concerted activity” that protests racial discrimination in the workplace. Employers may also create risk if they act inconsistently by permitting certain political or social messages but precluding others.

Second, even if there appears to be a legal basis to prohibit certain activity, employers should consider whether that is the right business decision for the company from a morale, public relations, and legal risk standpoint.

As political and social issues show no sign of abating in 2022, employers should develop a well-thought-out speech code that reflects the company’s values, best business practices, and compliance with law.

Employer Challenge #4:

Consider approaches to pay equity and compensation in light of fundamental shifts in market wages and growing demands for greater pay equity transparency.

Pay equity (including both race- and gender-based pay equity) continues to be in the spotlight. So, why pay equity and why now? There are several reasons:

1. Many states have passed or strengthened compensation and pay equity laws in the past year. For example, Colorado now requires the posting of salary ranges on most job descriptions. Other states no longer allow market differences to justify wage gaps.

2. Anticipated increases in the starting wage in many sectors will likely create pay equity issues if new employees are being paid more than existing employees in the same positions.

3. The Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) continue to prioritize pay equity as a major legal priority. The best defense to a pay equity lawsuit is to take steps now to understand whether your compensation structure includes pay gaps and, if so, the reasons for those gaps.

4. Employees, activists, and investors are getting in on the pay equity game and demanding more pay equity reporting and transparency.

The 2022 outlook for pay equity looks to be both substantial and active. Addressing pay equity should be a high-priority item in the next year.

Mike Muskat and Michelle Mahony are partners at Muskat, Mahony & Devine, a management-side labor and employment law firm in Houston. More information about Mike and Michelle, including contact information, can be found at www.m2dlaw.com.

From: Texas Lawyer