The labor market remained unexpectedly strong throughout 2023, which has been great for job seekers. However, many jobs are going unfilled. Automation and artificial intelligence are creating a shift in the future of work, and many employers are focusing more on skills than degrees to draw workers into jobs. In response, employees are requesting better pay, benefits and flexibility in their work environment.
The ongoing competition for workers has made it tough to retain employees, especially in the public sector. In response, states are reconsidering degree requirements for some positions, promoting non-degree and credential programs, and improving savings plans and portable benefits, among other policy options.
Here’s how legislatures will address these issues in 2024.
NCSL Forecast ’24
This special report from State Legislatures News covers the topics NCSL’s policy experts anticipate will occupy state lawmakers’ time in 2024 legislative sessions. Read the full report here.
Hot Topic: Tapping Into New Talent
Trending: Job Skilling and Training
A skills-first approach can reduce barriers for high-performing students on non-degree pathways, allowing them to access high-paying, in-demand jobs. Certain requirements, including a bachelor’s degree, can often eliminate otherwise qualified individuals from consideration.
ACTION: States are reassessing job roles to identify unnecessary degree requirements and promote skills-first hiring strategies. At least 18 states have removed degree requirements associated with government jobs to make hiring more inclusive and create economic opportunities for skilled workers previously overlooked by recruitment.
NCSL Resource: States Consider Elimination of Degree Requirements
To compete for workers in a tight labor market, states are creating occupational licensing policies that favor worker mobility, universal licensing measures, and ways to reduce barriers for specific populations, including veterans, military spouses and immigrants with work authorization.
ACTION: States continue to create standardized lists of requirements to ease licensing burdens for professionals moving between states. Massachusetts and Michigan, for example, provide portability of professional licenses for military spouses and service members. These reforms can fall under reciprocity agreements, state compacts or universal licensure.
NCSL Resource: Barriers to Work: Improving Access to Licensed Occupations for Immigrants With Work Authorization
Trending: Apprenticeship Pathways
As higher education costs remain high and most Americans live paycheck to paycheck, states are expanding career pathways such as apprenticeships and stackable credentials to help students find careers in health care, cybersecurity, construction and other high-paying fields..
ACTION: In 2023, Colorado created a program to provide funding for students pursuing short-term credentials in high-demand occupations. Kansas enacted a law expanding apprenticeships with state businesses, health care organizations and public schools. And Rhode Island created an apprenticeship pathways program allowing students to earn a bachelor’s degree at public institutions throughout the state by accumulating credits through apprenticeship.
Trending: Pay Transparency
Several states, including California, Colorado, Illinois, New York and Washington, now mandate the inclusion of salary ranges in job postings. Connecticut, Maryland, Nevada and Rhode Island require employers to disclose salary ranges by default or upon request during the interview process, though not in job postings. And some states, including Alabama, Delaware, Hawaii and Minnesota, ban employers from asking applicants for their salary history. These policies aim to mitigate pay gaps among various demographics and increase applicant engagement.
Hot Topic: Retaining Employees
Trending: Mental Health and the Workplace
The U.S. workplace is grappling with a mental health crisis as employees experience burnout and exhaustion. The pandemic only exacerbated the problem. States have placed a greater emphasis on providing reasonable accommodations for workers with mental health conditions; these can include modified work schedules, flexible leave policies, support animals and more. Some legislatures have adopted these policies to attract and retain a wider range of employees.
ACTION: Connecticut allows state employees to telecommute four days a week. Maine and New Jersey agencies are granting remote work options to certain public employees.
Employer support for employees’ mental health is crucial. Louisiana allowed behavioral health providers to serve patients over the phone or internet, and Arkansas ensured that state Medicaid coverage for certain mental health services provided via telemedicine continued after the COVID public health emergency ended.
To combat fatigue in the behavioral health workforce, New York, Texas and Louisiana created mental health hotlines for these workers.
Hot Topic: Improving Employee Savings Plans and Portable Benefits
Trending: Retirement Savings
A growing number of states are concerned by the anticipated costs of workers reaching retirement age with insufficient savings. These savings deficits will result in increased public assistance costs, reduced tax revenue, decreased household spending and lower employment over time, according to recent research. If current trends continue, insufficient retirement savings could cost state and federal governments an estimated $1.3 trillion by 2040.
ACTION: Nineteen states have now enacted work-and-save legislation, which creates retirement programs for private sector workers who lack access to on-the-job savings opportunities. States enacting programs in 2023 include Minnesota, Missouri, Nevada and Vermont; all are slated to launch in 2025.
Trending: Portable Benefits
By some estimates, more than a quarter of U.S. workers participate in gig, independent or other nontraditional work arrangements, leaving them without easy access to many traditional employment benefits. State and federal policymakers are contemplating how a suite of portable benefits linked to employees rather than employers might bridge this gap.
ACTION: Since 2018, lawmakers in at least a dozen states have introduced legislation that would create portable benefit programs for gig workers or allocate funds to foster experimentation in this area or study related issues. Utah and Washington state, for example, enacted portable benefits laws in 2023.
Worker classification issues are tightly bound up with portable benefits policy debates nationwide. The coming year is sure to see lawmakers continue to grapple with the promise and disruption of the on-demand economy and debate the ways labor market dynamics might influence nontraditional worker benefits.