Unemployment remained low throughout 2018, standing at 3.7 percent in December, forcing employers to come up with creative ways to recruit top talent. In 2019, changes ranging from new workplace harassment rules to health care laws will require entrepreneurs to adapt to a new normal.
Here are three things you need to know about the labor market in the New Year.
1. Employers will hire more gig workers.
Companies are expected to increase their hiring of independent contractors, or gig workers, in 2019, as the number of part-time workers exceeds the number of candidates looking for full-time work, says Fatime Doczi, the chief human resources officer at workforce-management firm ZeroChaos.
The strategy isn't without some risk, however, if you don't know what you're doing at tax time. Improperly identifying gig and full-time workers can lead to fines up to $1,000 per misclassified worker plus up to one year in prison, according to Justworks, an online platform that assists businesses with payroll, benefits, and compliance issues. Between 10 and 20 percent of employers misclassify at least one worker, according to multiple studies.
2. New laws will require updated harassment policies.
New state laws pertaining to workplace sexual harassment will force employers with workers in multiple states to change their internal policies, according to Peter Cappelli, director of the Center of Human Resources at Wharton.
"The big issue is that the state laws are all over the place," Cappelli says. California's new law forbidding the use of nondisclosure agreements in settlements involving harassment, sexual assault, or discrimination based on sex went into effect on January 1, while lawmakers in Arizona, Maryland, New York, Tennessee, Vermont, and Washington passed similar laws in 2018, according to the Society of Human Resources. These confidentiality agreements drew criticism during the #MeToo movement as they prevented victims from speaking out against their accusers and kept abusive individuals in power.
Maryland, New York, Vermont, and Washington also limited the use of forced private arbitration clauses in claims of workplace sexual harassment. In doing so, these four states gave employees the right to pursue actions in court rather than being forced to resolve such cases privately. If you have employees in multiple states, you'll need to decide whether to adopt state-by-state policies or develop company-wide rules that also adhere to new state laws, according to Cappelli.
3. Health care requirements could change as soon as 2020.
While the Affordable Care Act law requiring small businesses to offer health care to employees is expected to survive in 2019, 2020 will likely be a different story. On December 14, 2018, U.S. District Judge Reed O'Connor of Texas ruled that the ACA was not constitutional, arguing that because Congress repealed the individual mandate in 2017, the remainder of the ACA was now invalid. Sixteen states and the District of Columbia said they would challenge the ruling with an appeal, and the ACA will likely survive through 2019, according to David Trachtenberg, the chief marketing officer at workforce management firm ZeroChaos.
"There will be no impact on 2019 benefits," Trachtenberg said. "It will be more a 2020 or 2021 issue."
Still, employers should run through the specifics of the employer mandate, which requires companies to periodically offer qualifying health insurance to full-time employees. Staying up to date on which companies must comply--and how--will help prepare for any potential changes that could come in the following years.