Although President-Elect Biden's campaign platform contained very ambitious legislative initiatives in the labor and employment area, the general outlook for those being sent to his desk by Congress is dim. As has been the case with recent administrations, this will mean reliance on new regulations, stepped up enforcement of existing ones, and expanded requirements for federal contractors through executive orders. However, with Democrats controlling both houses of Congress, there may be some measures—such as paid leave and new pay equity protections—that could garner enough Republican support to overcome a filibuster.
The administration will act quickly to establish workplace COVID-19 protections. Dealing with the pandemic will be an early priority amid criticisms of the current DOL for failing to establish a workplace safety standard. At the same time, President Biden will have to be wary of anything that stalls an economic recovery—such as imposing substantial new costs on businesses, and especially small businesses. An emergency standard by OSHA, possibly prompted by an executive order, is expected in the early days of the new administration, with rigorous enforcement to follow. Whether it goes as far as the standard issued recently by California, which requires employers to maintain earnings and benefits for employees excluded from the workplace due to a positive COVID-19 test, remains to be seen.
Organized labor’s agenda will be moved through executive order and the NLRB, not legislation. Although labor has attached a high priority to returning the nation’s labor laws to a 1935 construct via the PRO Act, it will have to settle for something else. A pro-labor NLRB will make a major difference but, with Republicans holding the Board majority at least through most of this year, that will have to wait. In the meantime, President-elect Biden is expected to revive an executive order issued at the end of the Obama administration seeking to tie federal contracting to allegations of employment law violations. There are concerns that federal contractors could also be required to remain neutral during union organizing drives. With legislative options likely foreclosed, other conditions through executive orders could be attached to contracts as well, such as payment of a “living wage” or restrictions on the use of independent contractors. Any such orders are likely to be challenged in court. As with President Trump’s executive order restricting diversity training, HR Policy Association will continue to oppose attempts to micromanage the workplace policies of federal contractors that are unrelated to the quality and integrity of the federal contract.
The stage is set for a major battle over independent contractor and joint employer status. The rise of the gig economy has put traditional rules governing independent contractor status in play. Under the ABC test, adopted by California and several other states, workers cannot be independent contractors if they are engaged “in the usual course of the company’s business.” Despite rejection of this test by California voters for app-based drivers (Uber, Lyft, etc.), the Biden administration is likely to press for a similar test under federal laws. This would reach well beyond the gig economy and would be strongly opposed by the Association and the business community overall. The current Department of Labor finalized a regulation codifying the traditional test for independent contractor status today (Jan. 6), but the incoming administration will very likely freeze its implementation on Inauguration Day before eventually repealing it. Meanwhile, both DOL and the NLRB will likely seek to restore the Obama administration’s broad approach to joint employer liability for franchisors-franchisees, use of staffing agencies, and contract work.
A federal paid leave law is moving closer to becoming a reality. The pandemic heightened the awareness of the need for a healthy workplace environment. The paid leave requirements passed last year that apply to COVID-19 situations in small businesses received bipartisan support with very few complaints from the business community. Meanwhile, large multistate companies continue to clamor for relief from the proliferation of widely varying state and local laws and advocate for an approach that is not overly disruptive to the generous programs (such as PTO) they already offer. This could set the stage for bipartisan action if President Biden and the Congress are willing to work with the business community on a solution. However, a paid sick leave mandate may be more doable than paid FMLA. That issue is more complicated since most proposals involve an insurance program funded by employer and employee contributions.
Pay equity legislation faces fewer hurdles. Business supports the goal of pay equity, but differs in opinion on whether it should be done through increased legislation or (preferably) greater transparency and diverse representation in higher-paying jobs. Despite these differences, the shared goal may create the right climate for the Biden administration and members of Congress on both sides of the aisle to find a compromise. As more companies perform self-audits in this area, they will push for a liability shield similar to that in Massachusetts and contained in legislation introduced in the previous Congress by Rep. Elise Stefanik (R-NY).
