Global employer 2023 in review and 2024 preview

From evolving employee expectations about the role and purpose of work in their lives, increasing regulation, and the explosion of AI to continued economic uncertainty and geopolitical tensions, global employers are entering 2024 with a myriad of new challenges.

“Will we or won’t we return to the office? On what schedule, and for which purposes?” are common refrains. Opting for a hybrid working model and being transparent about the reasons for in-person work can help to ease the transition and minimize risks, including the risk of potential organizing activity.

Regardless of where we work, numerous surveys point to claims of increased worker stress and anxiety. Employers and legislators alike are moving to improve the work-life framework and address employee wellness through policy, including flexible working, more paid time off, right-to-disconnect laws, and more.

ESG initiatives remain front and center but face some headwinds. Companies are reexamining their sustainability and diversity and inclusion (D&I) initiatives based on stakeholder analyses and new legal obligations, while maintaining their commitment to creating a culture of inclusivity and belonging for all employees.

The post-COVID-19 uptick in employment legislative and regulatory activity shows no signs of slowing. Keeping up with legal developments and horizon scanning are more important than ever (this report and DLA Piper’s GENIE site can help).

AI is starting to transform work, with laws and risk management frameworks playing catch-up. Leaders are prioritizing understanding AI uses, putting guardrails in place, and finding new and responsible ways to use AI to enhance the workplace and build a competitive advantage.

The talent picture is likely to remain mixed in the near term. Some companies continue to struggle to find enough workers, while others are scaling back or shifting operations in response to slower global economic growth and geopolitical developments. For businesses implementing reductions in force (RIFs), compliance with new local laws related to individual and group terminations are critical. Those entering new jurisdictions are navigating local laws and developments and assessing more dynamic working arrangements, such as the use of contractors and labor outsourcing, as well as professional employer organizations (PEOs), employers of record (EOR) and global employment companies (GEC).

In this report, we identify top trends impacting global employers and share our predictions for the coming months. We also have produced country-by-country reviews of 2023 and 2024 previews for over 40 jurisdictions across EMEA, Asia Pacific, and the Americas. Access the global report and country content on our GENIE site. If you are not yet a GENIE subscriber, you can register here.

As always, please reach out to any member of DLA Piper’s Employment group or your DLA Piper relationship attorney with any questions about how these developments may impact your workforce.

1. Focus on work-life fit and employee wellness

Some employees prefer to separate work from life, while others like to blend the two. Regardless of work style, employees want to feel supported and able to attend to family and community life. This remains a dominant trend since the COVID-19 pandemic.

Employers and legislators are moving to modify the work-life framework through policy. New and proposed laws:

• Address remote and flexible working requirements (eg, Mexico, Czech Republic, Thailand, Peru, Poland)
• Provide a right to disconnect (eg, Belgium, Colombia, Luxembourg, Thailand, Mexico)
• Increase public holidays (eg, Singapore) and/or improve holiday leave (eg, Belgium)
• Reduce working hours (eg, Chile, Colombia)
• Promote predictable work schedules (eg, EU Transparent and Predictable Working Directive, UK Workers Predictable Terms and Conditions Act)
• Expand definitions of family to cover a wide range of caregiving relationships
• Expand coverage and amounts of sick leave (eg, California)
• Provide leave for more reasons (eg, menstrual pain, pregnancy termination, and pre-birth in Spain; miscarriage in France; bone marrow donation in Virginia; bereavement in Illinois) or leave for any reason (eg, 40 hours of paid leave in Illinois)
• Improve parental and family leave (eg, Australia, Denmark, Portugal, Romania, Sweden, Colombia, the UK)
• Protect pregnant and breastfeeding employees (eg, Singapore, the US) and women’s health (eg, China)
• Improve occupational health and safety (eg, Mexico, Australia, New Zealand, Hong Kong, California)
• Address employee mental health (eg, the US)

Employers are reviewing their employment contracts, policies, and practices to comply with myriad new laws and focusing on employee health and wellbeing.

2. Momentum around pay equity continues

Countries continue to take up measures aimed at tackling pay equity issues. According to the World Economic Forum’s latest global gender pay report, the global gender gap score for 2023 stands at 68.4-percent closed (with no country at full gender parity).

In Europe, employers are facing onerous requirements under the new EU Gender Pay Transparency Directive. Member States have until June 7, 2026, to introduce domestic laws to implement the Directive’s requirements. While 2026 may seem like a long way off, employers are encouraged to start preparing now given the nature of the changes and potential impacts.

In the US, several states enacted new salary posting laws (eg, Illinois, Hawaii, New York) or expanded employer obligations under existing laws (eg, Colorado) – with more on the way. Multistate employers are evaluating their approach to salary transparency based on footprint (eg, consistent approach that satisfies the highest standard v. jurisdiction-specific compliance).

Other countries have adopted measures aimed at closing the pay gap, including Australia, Canada, and Brazil. Our report, Gender pay transparency: A global guide to reporting obligations, covers developments around the world.

Employers are reviewing internal and external job posting policies and processes (including with third parties), considering the impact of pay transparency requirements on their talent strategy, and evaluating the risk of unequal pay lawsuits.

3. AI takes off – but not over (yet)

From the use of algorithms to screen applicants, predict worker capabilities, monitor performance, and identify patterns across workforces, to employee adoption of generative AI and the replacement of work through automation, AI is here and changing how we work. While its adoption cannot wait – globally, 96 percent of organizations are rolling out AI in some way – the regulatory landscape is fragmented.

In the EU, policymakers reached a landmark provisional agreement in December on the EU AI Act, which is expected to be enacted in 2024 or 2025 and carry substantial penalties. This same concept of self or independent auditing of AI is rapidly evolving in other jurisdictions, including China and the UK.

In the US, President Joe Biden issued an Executive Order (which shares some common ground with the AU AI Act) laying the foundations for the future regulation of AI. Momentum is also building for comprehensive federal bipartisan legislation. At the local level, New York City’s Local Law 144 21 took effect this year and regulates employers’ use of automated employment decision tools (AEDTs) in making hiring and promotion decisions. On November 27, the California Privacy Protection Agency released its initial rulemaking draft for automated decision-making technology. Other bills addressing AI in the employment context are pending in a number of states.

Meanwhile, traditional legal obligations and best practices under employment laws still apply. For example, in the US, the Equal Employment Opportunity Commission (EEOC) issued technical assistance addressing how employers should assess the use of AEDTs in the context of Title VII. Notably, this guidance did not include new policy; it merely reiterated previously established principles.

Employers can review bias in HR tools by conducting thorough due diligence, understanding the tool and its limitations, and requiring human oversight and regular review. Our AI governance report (based on a survey of 600 companies around the world) offers further insights on how to realize the value of AI.

4. Lawmakers increase protections under discrimination and harassment laws

Jurisdictions around the world continue to focus on protecting workers from discrimination and harassment. New laws and guidance:

• Seek to prevent discrimination and harassment (eg, Australia, China, Finland, Singapore, the US, Mexico, the UK)
• Expand protected characteristics (eg, gender identify or expression in New Zealand, height and weight in New York City, race-based hairstyles and texture in Texas and other US states, numerous characteristics in Singapore)
• Recognize new forms of discrimination (eg, discrimination by association and perception in Belgium)
• Lower the legal standard required to establish a discrimination or harassment claim (eg, Vermont, Texas) and/or limit employers’ affirmative defenses (eg, Colorado)
• Extend the period to bring claims (eg, New Zealand, New York)
• Provide new direct legal remedies (eg, Singapore) and/or increased damages (eg, Belgium, Maine)
• Require reporting of race and ethnicity data (eg, Brazil)
• Extend protections to other workers (eg, apprentices)

Some jurisdictions are also passing laws to limit the use of non-disclosure, confidentiality, and/or non-disparagement provisions to ensure employees are able to report and publicly disclose harassment and discrimination. For example, in the US, the National Labor Relations Board (NLRB) issued a decision (on appeal) restricting the use of broad confidentiality and non-disparagement provisions in severance agreements. Several states (eg, Colorado, Rhode Island, Virginia) also enacted new laws, building on federal legislation that took effect last year. Most recently, New York amended its law to impose greater restrictions on release agreements involving claims of discrimination, harassment or retaliation.

Many employers are also anticipating more conflict in the workplace based on global events, including the Israel-Hamas war, and, in the US, the 2024 presidential election. Differing views on political and social issues can lead to discord among employees in the workplace, and employees and other stakeholders often want to know where companies stand on these issues. Companies are encouraged to carefully weigh whether and how to respond in a manner consistent with their corporate values and legal obligations; how to navigate employee discussions at work; and how to respond to employees who may engage in controversial activities outside of the workplace.

5. New requirements and more conflict related to environmental, social, and governance (ESG)

Sustainability trends are expected to continue in 2024, with pushback in some jurisdictions.

The European Union’s Corporate Sustainability Reporting Directive (CSRD) is now in force, with its requirements taking effect in a phased manner from 2024 onwards. The CSRD is expected to directly impact around 10,000 non-EU companies (and more than 30 percent of these are expected to be US companies). The EU's Proposed Directive on Corporate Sustainability Due Diligence is also coming soon.

In the US, companies are in the crosshairs of competing forces. Federal agencies continue to push ESG priorities while defending regulatory actions in court. The DOL’s 2022 final rule addressing consideration of ESG factors by retirement plan fiduciaries remains embattled. Challengers have also filed a petition for rehearing en banc in response to a recent Fifth Circuit decision affirming the SEC’s board diversity rule.

The SEC recently adopted a rule cracking down on so-called "greenwashing" by US investment funds and has proposed rule changes that would require certain climate-related disclosures. The final climate disclosure rule is likely to be pushed into 2024. The SEC’s workforce disclosure proposal, which would enhance and standardize human capital management metrics and reporting, is also expected soon.

Meanwhile, states remain active – California enacted a law targeting corporate climate claims and two sweeping laws requiring public and private companies to report their greenhouse gas emissions and climate-related financial risk (with one taking effect on January 1, 2024).

At the same time, anti-ESG sentiment has been on the rise in some jurisdictions. For example, in the US, shareholder proposals questioning the wisdom of ESG initiatives, including those designed to foster D&I, have more than doubled within the past three years. Litigation aimed at curtailing corporate D&I initiatives also has seemingly increased in the wake of the Supreme Court’s decision in Students for Fair Admissions v. President and Fellows of Harvard College – even as the EEOC (and various other stakeholders) remains committed to workplace D&I practices.

Organizations are reviewing their sustainability and D&I policies and practices in accordance with their values and legal obligations and preparing for a more fragmented reporting and regulatory environment.

6. Increased risk from whistleblowers

The trend of increasing whistleblower protections and enforcement activity shows no signs of abating.

The EU Whistleblower Protection Directive is largely in effect. For most businesses, their approach is dictated by their risk tolerance level (including in regard to potential sanctions, which can include criminal and personal liability in some countries) and current arrangements. Companies are also navigating practical implementation challenges (eg, using a group-wide whistleblower reporting channel, identifying an individual to manage local reporting, designating required employee representatives, sharing information with central group functions). Our Guide to implementation of the EU Whistleblower Protection Directive allows users to compare implementing laws side by side.

In the US, the SEC received another record-high number of whistleblower tips in the 2023 fiscal year. The agency is also scrutinizing provisions in employment agreements and separation agreements for violations of Rule 21F-17, which protects against actions taken to impede whistleblowers. Further, the US Supreme Court is expected to weigh in next year on the issue of whether a whistleblower must prove their employer acted with a “retaliatory intent” – a decision that could have significant implications for whistleblower litigation.

7. Momentum for greater worker mobility and protections

From laws curbing employer use of restrictive covenants to new labor and working time protections, employers are reviewing their agreements, policies, and practices to mitigate new risks.

Lawmakers in various jurisdictions (eg, California, New York, Minnesota, New Zealand, Netherlands, the UK) are taking steps to curb the use of restrictive covenants and promote worker mobility. Our guide, Non-competes around the world, identifies key considerations for global employers as they look to ensure compliance with diverse constraints while protecting their business.

The landscape also continues to shift when it comes to the use of independent contractors, gig workers, and other casual workers. This year:

• More Member States adopted the EU’s Directive on Transparent and Predictable Working Conditions, which aims to protect workers in all forms of work, such as zero-hour contracts, casual work, and platform work.
• Jurisdictions introduced new definitions and criteria aimed at making it easier to assess whether a worker is an employee or independent contractor (eg, Australia, Netherlands, Norway). In the US, the NLRB reinstated a more worker-friendly misclassification test, with the DOL’s new standard expected soon.
• Lawmakers moved to increase protections for platform/gig workers (eg, Australia, Seattle). Of particular note, the EU Council is ready to start negotiations with the European Parliament on the EU Platform Work Directive, which is intended to improve working conditions for millions of platform workers. Track developments here.
• Lawmakers introduced changes limiting the use of fixed-term and replacement contracts (eg, Belgium, Italy).

The question of employment status for atypical workers will likely continue to be an area of heated debate into 2024 and beyond. Employers are working with counsel to review agreements and practices for engaging, using, and terminating workers.

8. Wage and hour and working time issues persist

Jurisdictions around the world are increasing minimum wages and overtime allowances, as well as tackling wage theft. Several states in the US increased penalties for wage theft, while a draft law in Australia would both increase penalties and criminalize such practice.

New time recording requirements are posing challenges for employers. In Germany, a draft law would impose several changes to the German Working Hours Act and other regulations aimed at implementing the obligation to record all working time (not just overtime and Sunday working).

US employers are also facing new risks. The Department of Labor (DOL) is expected to issue its final rule on overtime exemptions, which could extend overtime protections to 3.6 million workers – and legal challenges are expected.

California – already one of the highest-risk states – could get even riskier. This year, the California Supreme Court issued a unanimous decision concluding that plaintiffs who are compelled to arbitrate their individual claims for civil penalties under the California Private Attorneys General Act (PAGA) retain standing to prosecute non-individual PAGA claims on behalf of other aggrieved employees and the State of California. In addition, the California Supreme Court is set to decide several major issues which could significantly impact the scope of wage and hour litigation going forward. Employers are reviewing any existing arbitration agreements and the scope of their class and representative action waivers (or considering the benefits of implementing arbitration agreements).

9. The labor movement gains ground

Employers are paying more attention to the labor landscape based on recent developments. In the US, for example, unfair labor practice charges and union representative petitions are up, and hundreds of thousands of workers participated in strikes in 2023. The NLRB is also focused on changing labor law to create a more union-friendly environment.

In the EU, the Commission plans to present its draft directive on European Works Councils in early 2024.

In Australia, the increase in streams and scope for multi-employer enterprise bargaining and agreements means more employers will be compelled to bargain together and more employees will be covered by enterprise agreements. New draft legislation could also increase the ability of unions to enter the workplace to inspect for breaches and introduce a paid leave requirement for union representatives.

In the UK, employment businesses are once again prohibited from supplying individuals to perform duties normally carried out by a worker who is taking part in a strike or other industrial action.

Employers are reviewing their policies and taking steps to ensure a positive work environment.

10. Contraction and expansion continue amid economic and geopolitical uncertainty

In response to economic challenges in 2023, such as inflationary pressures, slowing growth, disruptions in the capital markets, and rising interest rates, many companies moved to implement cost-saving measures, including reductions in force. Local laws vary widely, however, making it critical for global employers to take care when assessing and implementing such measures.

Meanwhile, companies continue to expand and shift their global footprint, taking into account evolving geopolitical risks (eg, the war in Ukraine, Israel-Hamas war) and legal frameworks, including new export control rules and anti-discrimination laws. For companies in expansion mode, new ways of working – such as the use of contingent workers, PEOs, EORs, and GECs – are on the rise. Companies are assessing options and related risks, including misclassification and joint employment.

View our GENIE site for more information about key developments, including country by country reviews of 2023 and previews of 2024 for over 40 jurisdictions across EMEA, Asia Pacific and the Americas. If you are not yet a GENIE subscriber, you can register here. 

You can also view our Global employment webinar: 2023 review and 2024 preview here.

Learn more

Employers will want to continually monitor developments around these issues. To learn more about the implications of these developments for your business, please reach out to any member of DLA Piper’s Employment group or your DLA Piper relationship attorney.