STHRM, INC. 2023 Economy, Employment, and Government Compliance Projections

Economy

• Recession in the first half of 2023 for 18 to 24 months

  • The labor participation rate is at 62.0 and declining

  • Increased taxes

    • Consolidated Appropriations Act 2022 and 2023

    • Inflation Reduction Act

    • IRS changing tax brackets

• Inflation and stagflation for the next several years

  • Inflation rates will range from 9 to 15%

    • Think Late 1970 to mid-1980s

  • Increased interest rates

    • Sourcing credit will be difficult

• Conference Board leading indicators down for the last nine months

• ISM Manufacturing index at 48.4 for December 2022 lowest since May 2020

• Mergers and Acquisitions (M&A) down for 2022

• International supply chain disruption

• Remember: Cash is King

Employment

• Recruitment will continue to be exceptionally hard work

  • Lack of manufacturing skilled workers

  • Last of the baby boomers will retire in 2023

    • Retirees from years ago may return to work on a part-time basis

    • Resulting in 400k to 900k less employee through 2040

  • Wages, salaries, and benefits costs will continue to increase

  • Reskill and upskill current and new employees

    • Coaching and mentoring employees

• Flexible work arrangements

• Employee value proposition

• The trendline is temporary employment is declining

Government Compliance During the past two years, all federal agencies have signed agreements to refer complaints to each other.

OSHA – Expect more inspection

• Increase number of OSHA inspections  

• Increase in penalty costs – driven by cost of living by 8.7% in 2022

Wage and Hour – Expect to be inspected

• Independent Contractors

• The overtime rule will be revisited

  • Salary Basis Requirement may increase salary requirements for:

    • Executive

    • Professional

    • Administrative

    • Sales

    • Computer  

• Increase in penalty costs – driven by cost of living by 8.7% in 2022

National Labor Relations Board

• All employers, both union and non-union alike, should be aware of recent events, or they may unwittingly end up violating the NRLA

• Increased union activity and easier workplace organizing

  • 53% increase in election petitions filings this year

  • Younger adults, ages 18 to 34, also approve of unions at a high rate 77%

  • 19% increase in the number of unfair labor practice charges this fiscal year compared to last year.

  • Annual increase in petitions and unfair labor practices filing combined is 23%, the largest increase since 1976.

• Micro union organizing

• Expanded remedies for Unfair Labor Practices

  • In Thryv, Inc., the National Labor Relations Board expanded the scope of “make-whole” remedies available to workers who allege unfair labor practices.

• Workplace uniforms

  • Employees allowed wearing union buttons

  • Exploring labor practices over alleged discriminatory layoffs

• Proposed in Joint Employment Standard

  • Employers would be considered joint employers if they “share or codetermine those matters governing employee’s essential terms and conditions of employment,” such as scheduling, wages, benefits, and discipline.

• Captive audience

  • NLRB will conclude that mandatory company meetings to discuss the pros and cons of joining a union is illegal

• Voluntary recognition

  • An employer may voluntarily recognize a union when presented with authorization cards signed by most employees in a bargaining unit ("card check"). If you do handle the authorization cards, you accepted the union without a vote by the employees.

Equal Opportunity Commission

• Focus on independent contractors

• Pay audits