HR News: Stronger-Than-Expected Job Market, Drawing on 401k, Rising Up Against RTO, and More

This is a weekly roundup of the latest in HR News.

This week in HR News is more optimistic than others recently. Economists are observing trends that signal the United States may avoid a recession. Frontline and knowledge workers are united in their mission to transform the workplace because they are supporting each other’s calls for higher pay and flexibility. One bit of big news for those in Human Resources is the fact that the National Labor Relations Board is questioning the legality of non-compete clauses. 

While these headlines point to a more employee-centric workplace and a brighter tomorrow, things are not all rainbows and lollipops. Word surfaced that more people are prematurely taking money out of their 401k in emergencies. Certainly, high inflation and rising cost of living are still causing suffering, even if other indicators may mean a stronger economy. 

Read the briefs to learn more about these headlines:  

The Labor Market Hums

Although Zendesk announced it is laying off 8% of its workforce, the May Jobs Report shows a picture of an economy that is in far better shape than people have been anticipating. In April, job openings in the United States grew to a three-month high of 10.1 million, according to MarketWatch.

In May, the United States saw an uptick of 339,000 jobs added, which is far higher than the expected 190,000. In addition, a bipartisan deal to pass the budget bill allowed the United States to avoid default, which would have ushered in a global economic crisis with long-lasting ramifications. While unemployment rose to 3.7%, many economists remain optimistic. 

“Overall, the [jobs report and broader economic] data continues to show an economy that’s certainly not in a recessionary mode and perhaps is growing at a healthy pace,” Preston Caldwell, Chief U.S. Economist at Morningstar, told CNN

Workers Drawing from Their 401k

The New York Times shared that more people are taking money out of their 401ks well before retirement to pay for emergencies as the cost of living rises. Experts say that it is happening more for a number of reasons, including that it has become easier to withdraw funds at the same time as inflation is putting a crunch on people. 

“Two large retirement plan administrators, Fidelity and Vanguard, have observed increases in hardship withdrawals, which may be taken only if there is ‘an immediate and heavy financial need,’ according to the Internal Revenue Service and as reported by the Times. “Fidelity found that 2.4 percent of 22 million people with retirement accounts in its system took hardship withdrawals in the final quarter of 2022, up half a percentage point from a year earlier. A similar analysis by Vanguard found that 2.8 percent of five million people with retirement accounts made a hardship withdrawal last year, up from 2.1 percent a year earlier.”

Do Non-Compete Clauses Violate Federal Law? 

National Labor Relations Board (NLRB) General Counsel (GC) Jennifer Abruzzo shared an enforcement memo in which she wrote that non-compete clauses in employment contracts and severance agreements violate federal law. While these memos are not binding law, they do indicate that the GC may prosecute, according to the National Labor Law Review. The argument is that these clauses are a violation of employee rights. 

Workers Protest RTO Policies

One of the arguments that employers have presented in their quest to get everyone back into offices is that work from home policies are unfair to frontline workers, who have no choice but to work outside the home. However, frontline workers at Amazon and Starbucks are supporting knowledge workers, who are pushing back on return to office policies. LinkedIn shared details of a New York Times article that featured quotes from at least one frontline worker who basically said those workers gain nothing from taking away flexibility from others. This comes as more companies are trying to return to working in the office full time again. 

Photo by Valeria Boltneva for Pexels