Fall Outlook: Biden’s Final Moves — Global Workplace Trends — Lame Duck Session

No matter who wins in November, a new administration is coming … this year’s Outlook covers everything you need to watch & plan for:

• Unfinished business: The Biden admin’s attempts to empower workers are largely stalled in court … Congress needs to pass essential spending bills in its “lame duck” session … and Democrats are considering filibuster reform to pass priority bills by year’s end.
  
  
• Decentralized impacts: Most policy actions are with federal agencies, state legislatures, and the judiciary. We’ll soon see if the end of “Chevron deference” leads to less regulatory overreach.
  
  
• Global HR issue overlap: Workplace issues from pay equity and transparency to union organizing and AI are gaining traction in the U.S. and internationally amid global elections and rising populist rhetoric.

Read on for our insights…

1. Lame Duck Session's Packed Legislative Agenda

By Spencer Bell

Lame duck sessions allow sitting administrations to reinforce their legacies before a new administration takes the helm, but even that is contingent on the election outcome.

The big picture: Congress has only 35 joint legislative days left, with 20 occurring in the post-election lame duck session, and a packed agenda to accomplish by the end of the year.

• Crucial government funding bills, multiple must-pass authorization and extender bills, as well as the Fiscal Year 2025 National Defense Authorization Act (NDAA) and several other large congressional lifts hang in the balance.
  
  
• Government shutdown looms with a September 30th end of the fiscal year which will take up much of the pre-election oxygen in Washington D.C..
  
  
• Workforce Innovation and Opportunity Act (WIOA) reauthorization, with its focus on skills and employer-directed training is the most employer-focused WIOA yet. The bill passed the House with bipartisan support and may have legs during the lame duck.
  
  
• Yes, but: Although the Senate version is expected to be similar to the House, the exact provisions are yet unknown. Add-ons to the draft bill are always a possibility, like blacklisting, which would preclude participation of companies with labor law violations from receiving WIOA funding.

In the meantime: Senate votes on judicial and board nominees and confirmations will take precedence on the Hill along with other items requiring simple majorities (51 votes). Senate Majority Leader Chuck Schumer (D-NY) has already floated possible filibuster reform next year if the Democrats control the Senate, to add exceptions to the normal 60 votes needed to override a filibuster.

• Expect increased activity in the Judicial and Executive branches through the election with a legislative uptick after Nov 5th when both sides of the congressional aisle can come together without ceding ground.
  
  
• We are already seeing agencies come together to send key messages to this effect (e.g., the recent collaborative effort on antitrust and labor enforcement announced by DOL, FTC, DOJ, and the NLRB).

2. Converging Global Trends and Policy

By Wenchao Dong

Employment policy is experiencing a global convergence as a record number of elections affecting nearly half the global population influence workplace public policy agendas.

• Employees worldwide are demanding more from their employers, while international unions are actively institutionalizing.
  
  
• Intragovernmental pressure is a likely new tactic, such as the Biden Administration’s unprecedented move urging Germany to investigate Mercedes for unfair labor practices after the UAW's failed unionization vote in Alabama.
  
  
• Global tensions in the Ukraine, Russia, Israel and Gaza are inflaming U.S. political divisions and impacting the workplace.

?DEI and ESG are trending worldwide.

• A year after SCOTUS’ ruling against affirmative action in college admissions, activists are pressuring companies to retreat from DEI commitments. Europe, meanwhile, is adopting more DEI mandates.
  
  
• EU nations must carry out the Women on Boards Directive, requiring large listed companies to ensure women hold at least 40% of non-executive director positions by 2026.
  
  
• Two big EU directives spotlight ESG issues. The Corporate Sustainability Reporting Directive requires companies to report on their sustainability-related impacts, risks, and opportunities. The Corporate Sustainability Due Diligence Directive requires companies to implement due diligence measures and report on the results publicly. Both carry significant penalties for noncompliance.

?Pay transparency and equity are hot topics globally.

• The EU Pay Transparency Directive mandates employers to disclose the pay gap between male and female workers and provide pay ranges for job openings. It also bans inquiries about pay history, similar to many U.S. state laws.
  
  
• In the U.S., 11 states have enacted laws requiring pay ranges in job postings and 22 states have salary history bans with more expected next year.
  
  
• Brazilian and Australian employers face new gender pay gap reporting requirements, signaling a commitment to tackling pay inequity.
  
  
• The UK's Labour Party plans to extend pay reporting to cover ethnicity and disability. In the U.S., the EEOC aims to expand pay reporting in 2025.

?Workplace AI and working hours are also under the spotlight.

• The EU AI Act, the first comprehensive AI law, imposes obligations on employers using AI in the workplace. It may become the defacto standard globally in the absence of other laws.
  
  
• Several Latin American countries are reducing maximum working hours and implementing "right to disconnect" legislation, empowering employees to refuse work-related contact outside working hours.
  
  
• The White House and Congress are exploring federal AI legislation and regulation, while states — such as Illinois, Colorado, and California — are off and running in this space.

✊ Labor rights and collective bargaining are evolving.

• The European Commission has proposed significant reforms to the European Works Council (EWC) Directive.
  
  
• Multiple powers — Germany, China, South Korea, and the UK’s Labour Party — are strengthening workers’ ability to organize.
  
  
• America’s recent union wins and uptick in worker organizing may prove superficial if actual agreements are not reached. This may provide even greater motivation to strengthen federal labor law, depending on who wins in November.

3. Labor: What’s Left for President Biden?

By Gregory Hoff

After promising to be the most pro-labor president in the nation’s history, President Biden has only months left to deliver on his labor legacy. Here’s what we’re watching:

Labor law reform will remain elusive: President Biden sought to deliver federal labor law reform in the form of the PRO Act, which would have radically changed the law in favor of union interests.

• While introduced multiple times, the PRO Act failed to gain any traction in Congress under President Biden and stands zero chance of passing before the end of the year.
  
  
• Expect no changes on the legislative front, with the potential exception of pro-labor provisions snuck into funding bills that will ultimately be swatted down by House Republicans.

The NLRB marches on: The Board will continue to be the main implementing tool of the Biden labor agenda as legislative and other regulatory efforts have fallen short. Decisions impacting your workplace that could arrive before year end include:

• Restrictions on: Non-compete agreements … arbitration agreements … mandatory employer-held meetings.
  
  
• Increases to: Union access to employer property … damages for failure to bargain in good faith … protections for political and social protests.

Yes, but: Federal courts have increasingly rejected unreasonable NLRB decisions, providing some relief for employers.

• Recent court rejections include NLRB decisions on employee dress code limitations and disciplining employees for offensive conduct.
  
  
• We may see more rejections of Board decision-making before the end of the year, including the highly controversial Cemex decision (card check).

Worth watching: NLRB Chair McFerran’s term expires at the end of the year, setting up a pivotal nomination battle in the Senate.

• The Biden administration aims to push through McFerran’s confirmation, along with a Republican nominee, to maintain control of the Board through at least 2026.
  
  
• Expect fierce opposition from Senate Republicans and potential Democratic defections.

The bottom line: The NLRB is likely to be the only source of significant labor law developments through the end of the year. Even so, these decisions could face more resistance in federal courts, blunting any potential negative implications for employers.

4. Federal Court: Where Regulations Go to Die

By Gregory Hoff

As part of its “all of government” approach, the Biden administration introduced several key regulations over the last two years, including non-compete agreements, overtime, worker classification, joint employer liability, and OSHA workplace inspections.

Where will all these rules stand at year-end? Each has been the subject of litigation and, to date, three of the five have been fully or partially blocked in court, illustrating the important role federal courts are playing in providing a firewall against workplace regulation.

• FTC non-compete rule was fully blocked by a Texas federal district court judge in August 2024. The future of the rule remains uncertain as the FTC decides whether to appeal, ensuring the rule will remain blocked for the foreseeable future.
  
  
• DOL overtime rule was partially blocked for Texas state employees only, otherwise it is in effect. Multiple pending lawsuits could nullify the rule entirely for all employers before the end of the year.
  
  
• DOL worker classification rule is in effect but facing a lawsuit in the Fifth Circuit Court of Appeals, which could block the rule by year's end.
  
  
• NLRB joint employer rule was fully blocked by a Texas federal district court judge in March 2024. Surprisingly, the NLRB opted against appealing the decision and is instead deliberating on a potential replacement.
  
  
• OSHA walkaround rule is in effect, but multiple pending lawsuits could block the rule by the end of the year.

What’s next: With the exception of non-competes, expect decisions by the end of the year that will largely determine the ultimate fate of these rules - stay tuned!

5. Health Care: Is Bipartisanship Possible?

By Margaret Faso

Health care is one of a handful of issues in play for 2024 with the seeds of bipartisan agreement germinating from voter desire for reduced costs and expanded access.

1) Final Mental Health Parity Rule: The final mental health parity rule is expected to be released in September. It will likely include unworkable requirements for employers and face litigation.

2) Transparency and PBM Reform: A rare instance of strong bipartisan support may push PBM and health care transparency reform across the finish line before the end of 2024. The Senate still needs to bring legislation to the floor, but it will likely closely mirror the House passed Lower Costs, More Transparency Act.

• The FTC is investigating the practices of PBMs as well as vertical integration in the health care industry. The new administration will have an impact on whether these investigations continue.
  
  
• Read HR Policy’s CHRO Guide to Leveraging Health Care Price Transparency which provides steps HR teams can take to lower health care costs and improve employee experience with benefits.

3) ERISA 50th Anniversary: This September marks the 50th anniversary of the passage of Employment Retirement Income Security Act (ERISA). Its preemption provision allows multi-state employers to provide uniform benefits to all employees.

• Why this matters: In the absence of federal reform on issues like PBM transparency, several states have enacted legislation which threatens preemption and would require employers to navigate a patchwork of state laws.

6. Exec Comp Shifts Possible in New Proxy Season

By Megan Wolf

As companies prepare for the 2025 proxy season, incentive plan structures for corporate CEOs and executives at financial institutions, are under the microscope.

Proxy advisors ISS and Glass Lewis have signaled a focus on CEO pay and human capital metrics in their annual benchmarking surveys that precede the announcement of their 2025 policy changes.

• Despite previous adherence to performance-based pay, firms are now facing pressure to consider the use of time-based awards with extended vesting periods. European investor Norges Bank has long-criticized performance plans. Glass Lewis calls out excessive executive perks and “make-whole” awards in inducement packages.
  
  
• In the midst of uncertainty on whether the SEC will push a proposed HCM rule forward, ISS suggests increased support for shareholder proposals on DEI representation, promotion, retention and hiring rates.

Nearly fifteen years after the Dodd-Frank Act passed, the final piece, Section 956, was re-proposed for a third time (kind of).

• This rule requires six agencies (Federal Reserve, SEC, FDIC, OCC, NCAU and FHHA) to issue a joint rule that limits how executives at financial institutions are paid within their incentive plans.
  
  
• In May, four of the six agencies made an effort to revive the proposal with some additional restrictive provisions that were not included in the 2016 proposal.

?Watch your inbox in January for our 2025 Policy Outlook covering what to expect from a new administration. Regular Friday updates start again next Friday, September 13.