2022 Fall Outlook: Expect Uncertainty, Prepare for (More) Disruption

As Yogi Berra once said, “It’s tough to make predictions—especially about the future.” The past 32 months have proven the truth in this statement, and fall 2022 will be no different. Economic uncertainty, the impact of the November elections, public policy shifting back to the administrative agencies, evolving employee expectations, and the importance of employee and employer voice will challenge chief human resource officers and their teams to anticipate what’s ahead—and respond. Read on for our outlook of the top workplace policy developments we expect this fall.

It’s the Economy . . . .Inflation of 8.5% is at a near 40-year high while talent remains tight; 74% of our members are monitoring but not changing hiring – yet. However, the shift from goods consumption to services may relieve some pressure.

• Employee voice and discontent in certain industries continue to lead to union organizing, especially in the retail, grocery, and distribution businesses.
  
  

Political shifts ahead: Despite impressive summer legislative wins for President Biden—particularly the Inflation Reduction Act—Republicans are still expected to retake the House this November, meaning a split Congress for the remaining two years of President Biden’s first term.

• Expect to see a flurry of “messaging bills” in the House and Senate—potentially including votes on labor legislation—as Democrats contrast their priorities with Republicans ahead of November 8, and Republicans take aim at ESG initiatives.
  
  

As Congress shifts to election mode, the Biden administration will ramp up its  “whole-of-government” approach to accomplish labor, employment, and employee voice priorities through regulation and enforcement initiatives.

• It is not yet clear how quickly the agencies will act, and with respect to which issues.
  
  
• However, we have already seen agencies such as the Department of Justice, the Federal Trade Commission, and the Agriculture Department push policy priorities ranging from compensation to noncompete agreements to federal contractor debarment, as well as expanded agreements among agencies to share compliance information.
  
  
• Meanwhile, traditional labor and employment-focused agencies will continue to churn away, with expected proposed rulemakings on independent contractor status and the overtime salary threshold from DOL this fall.

SEC Human capital metrics (HCM) rules and diversity disclosures will be a focal point. The SEC will propose a prescriptive human capital metrics (HCM) disclosure rule this fall focusing on categories such as workforce composition, turnover, skills and development training, compensation and benefits, and diversity. Our Center On Executive Compensation has been engaged on this issue and will submit comments.

• In a related development, if a third Democratic Commissioner is confirmed this fall, the five-member EEOC could pursue a revised collection of pay data by gender, race, and ethnicity. Republicans currently have a 3-2 majority.
  
  
• Meanwhile, the SEC released a final rule on the Dodd-Frank pay for performance disclosure requirement. The new disclosures will be required in proxies for fiscal years ending on or after December 16, 2022 – which means they will be required in 2023 proxies for calendar-year companies.

Geopolitics complicate employee relations, supply chain issues for multinationals: Still stung by the Russian invasion of Ukraine, companies operating in Europe now face a budding energy crisis.  Concerns include potential energy shortages and the impact on everything from operations to employees having adequate home heat.  

• In the Asia-Pacific, U.S.-China relations continue to sour.  Worries about trade wars complicate the already fragile supply chain between the countries, which has yet to recover from COVID-19.
  
  
• Several Latin American countries are suffering from runaway inflation, which is projected to reach 90% in some countries.   Companies operating in the region face tough choices in managing workforces while governments contemplate steps to fix this crisis.  Mexico, meanwhile, remains a hot spot amidst a surge of independent unions ahead of the last stage of the implementation of the 2019 labor reforms.
  
  

The Supreme Court will have a broader impact on employment law: The Court’s abortion (Dobbs v. Jackson Women’s Health Organization) and climate rule (West Virginia v. EPA) decisions both have employment policy implications, with the latter opening the door for future Court focus on regulatory action.

• The Court also may be poised to invalidate or narrow the use of affirmative action in education. Such action could foreshadow similar challenges under Title VII.
  
  

Privacy regulation of HR data is here. Last night, California legislators failed to extend an exemption of HR data from its consumer-focused privacy law—meaning that, as of January 1, 2023, employee, job applicant, and contractor data will be regulated by the full suite of privacy rights granted under the law.

• At the federal level, the FTC has issued an Advanced Notice of Proposed Rulemaking on data privacy that cites concerns regarding worker monitoring and discrimination.
  
  

Health care inflation will put a more intense focus on affordability and health equity, even as employee wellbeing and mental health continue to be priorities.

• Cost management will begin to be a more important priority for companies and CHROs.
  
  
• A robust Biden administration regulatory agenda beginning with proposed guidance on how employers are to comply with their mental health parity requirements will keep employers busy through 2023.
  
  

NLRB decisions will shift the law back to Obama-era Board positions and perhaps far beyond it. The top three issues to watch: Cases are pending that could limit employer workplace rules and policies, allow for smaller bargaining unit sizes (“micro units”), and make it harder for employers to classify workers as contractors vs. employees.

Meanwhile, understanding the context and opportunity for employer engagement and response to employee voice issues is more important than ever. In this shifting context, employers may do well to heed the advice of the late Peter Drucker: “The best way to predict your future is to create it.” We invite you to join us next week at our September 7-8 Washington Policy Conference as we discuss these public policy issues, the elevated importance of employee relations, the pushback against ESG, and the reactions to the Disney and Starbucks situations.