In almost every city and town in the United States, you cannot drive down a street without seeing “Help Wanted” signs or hearing about how businesses cannot fill open jobs in the face of post-pandemic customer demand. While this is a worldwide phenomenon, in the United States, where enhanced stimulus unemployment benefits have made it somewhat easier for workers to be more selective, almost every sector, from airlines, restaurants, and hotels to manufacturers and financial services companies, has felt the pain.
And it’s not just new employees. In April 2021, more than 4 million U.S. employees quit their jobs. On top of those who already had quit, more than half of those surveyed in an April 2021 EY survey said they would quit their jobs after the COVID-19 pandemic if their employers did not offer them flexibility and additional perks. Offering employees these perks has practical and legal implications.
The types of things employers are considering to attract and retain employees include:
- Increasing hourly rates
- Sign-on bonuses
- Free lunches and snacks at work
- Monthly $50 gas cards
- Referral bonuses
- Enhanced benefits, such as health, tuition assistance programs, and student loan repayment programs
- Increased vacation and PTO benefits
- Raffle drawings
- Remote working and flexible hours
- On-demand pay days
- Reconsideration of individuals with criminal records
- Recruiting employees from other states and U.S. territories
While any one of these strategies may not necessarily be a panacea for employee shortages, they do offer alternatives for employers to try to meet their needs. But there are significant potential legal issues. For instance, in a union environment, an employer cannot simply change the terms and conditions of employment by offering increased wages or other economic benefits to represented employees. The employer must first bargain with the union before making changes. Even things like giving away pizza could lead to an unfair labor practice charge if not implemented carefully.
Also, remote working raises several challenges, including issues that arise when employees are working off-site in a different state from where the business is located. Companies must register to do business and withhold taxes in those states where employees are working and could be penalized if they fail to comply with state requirements. Also, some employees may raise discrimination claims if some employees are offered remote working accommodations while others are not. Employers must have clear and uniform guidelines regarding expectations for remote work.
Finally, there are tax and immigration law issues raised by recruiting workers from abroad, implementing new benefits packages for employees, or offering raffles. Any of these strategies should be vetted by legal counsel to understand the associated potential risks.
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