New Year. New Laws. New Success.
With a new year comes, almost universally, new goals. Many of us take the end of December and beginning of January as a time for valuable self-reflection, evaluating where we are, where we would like to be, and how we can get there. This state of self-reflection had the potential to set the stage for significant personal and professional growth, and in reality, is something we should probably engage in far more often - although it is admittedly tough to beat the inspirational symbolism of the new year. For businesses specifically, there is another reason the new year inherently spurs evaluation: the commencement of new regulations. In this article, we dive into some of the most impactful regulatory changes taking effect in 2024, with a special emphasis on those throughout the State of California.
As you will recall from our piece on pay transparency last year (Pay Transparency: Embracing the Labor Market Shift as an Advantage, Not an Impediment), our experts here at Stone Stoup focus on the business advantages that can be found in these shifts, as opposed to taking a surface-level negative view. It is neither productive nor useful to lament any ostensible difficulties presented by these changes; rather, we emphasize looking for the ways in which they may create opportunities and value. We examine challengers holistically and optimistically, and encourage our clients to do the same.
The most widespread regulatory changes taking effect in 2024 are in the form of minimum wage increases. The National Employment Law Project reports increases across 85 states, counties, and cities this year.1 This comes on the heels of a remarkably strong several years for the labor market, with employment and hiring remaining fairly robust even in the face of moderating inflation. Additionally, the last decade has seen many workers across various industries organize to demand higher wages; according to NELP, “this worker movement has not only led to the adoption of higher state and local minimum wages - it has also helped seed worker activism and mobilization across our economy and led to greater equity for workers of color.”2 Most of the increases were effective on January 1st, though some do not begin until later this year.
On a state level, California is seeing a number of new employment laws take effect in 2024. Employment law firm Ogletree Deakins outlines some of the most prominent of these, which include expanded paid sick leave; reproductive loss leave; the voiding of noncompete agreements; and the adoption of workplace violence prevention programs.3 In addition, Governor Gavin Newsom has signed several industry-specific laws, among them increased minimum wages for fast-food workers (to $20/hour) and healthcare workers.4 Once again, most, but not all, had a January 1st start date.
As discussed above, it is common and natural for employers to have a negative gut reaction to these kinds of shifts. After all, new regulations are not always accounted for in the business plan, and companies tend to welcome steadiness and predictability over change. However, there is much opportunity to be harvested here. Take the expansion of sick leave, for instance - at face value, this may seem to disadvantage employers, with employees receiving more time away from the office and thus clocking fewer hours doing tasks. However, in actuality, this shift is beneficial for all stakeholders. Research shows that the adoption of paid sick leave mandates leads to an average 6.1% increase in labor productivity and a 1.6% uptick in firm profitability.5
Even when it presents an opportunity, we recognize that change can be daunting. As California and national employers look to navigate the myriad regulatory laws taking effect this year, there are certain to be some necessary adjustments that require effort to address. At Stone Soup, we are experts at identifying how businesses can best adapt to shifts in requirements and leverage them to their advantage, both for employers and employees. In times of transition, having an experienced and knowledgeable partner is more critical than ever - and we hope to be that partner for you.
Stone Soup Performance Consulting partners with businesses to help ensure your human resources function is well-equipped with the staples—solid, legally compliant, and culturally matched human resources policies and practices that govern the inner workings of your organization. Stone Soup Performance Consulting is here to help you with your HR needs.
1Lathrop, Y. (2023, December 26.) Raises from coast to coast in 2024. National Employment Law Project. https://www.nelp.org/publication/raises-from-coast-to-coast-in-2024/.
3Harvin, E., Thompson, C., and Olmstead, C. (2023, November 6.) California’s new employment laws for 2024: A roundup of new laws. Ogletree Deakins. https://ogletree.com/insights-resources/blog-posts/californias-new-employment-laws-for-2024-a-roundup-of-new-laws/.
5Volpin, P. (2023, January 23.) Do paid sick leave mandates increase productivity. Drexel University LeBow College of Business. https://www.lebow.drexel.edu/news/do-paid-sick-leave-mandates-increase productivity#:~:text=The%20adoption%20of%20paid%20sick,where%20their%20headquarters%20are%20located