Biden Administration Wage and Hour Update: 50 Days In…

Proskauer - Law and the Workplace

Proskauer - Law and the Workplace

We’re 50 days into the Biden administration.  Here’s an update on where things stand with respect to wage and hour law at the federal level:

  • On March 11, 2021, the U.S. Department of Labor’s Wage and Hour Division (WHD)—as expected—announced its proposals to rescind the Trump-era rules on independent contractor classification and joint employment.
    • WHD’s Notice of Proposed Rulemaking (NPRM) to withdraw the independent contractor rule—which was initially scheduled to take effect on March 8, 2021 but then delayed until May 7, 2021 by virtue of the White House’s January 20 regulatory freeze memorandum—is here. The Trump-era rule would have relaxed the standards for classifying workers as independent contractors, elevating two factors (control and opportunity for profit or loss) above other factors and giving them greater probative value in the classification analysis.  Per the NPRM, this approach would mark a departure from WHD’s longstanding approach and be inconsistent with Supreme Court precedent.  President Biden has signaled an intention to bring the federal classification rules in line with the “ABC” test adopted by certain states, which can make it considerably more difficult for certain businesses to classify workers as independent contractors.
    • The NPRM to rescind the joint employment rule—which took effect on March 16, 2020—is here. Per WHD, the rule—which set forth separate considerations for “horizontal” and “vertical” joint employment—departs from and has been limited by judicial precedent and otherwise is not sufficiently grounded in the statutory text.
    • Public comments on both NPRMs are due by April 12.
  • The (first) push to raise the federal minimum wage above $7.25 fell flat. On March 5, 2021, the Senate (58-42) voted down an amendment to the COVID-19 relief bill that would have increased the minimum wage to $15 per hour by 2025.  The House of Representatives approved the final version of the bill—the American Rescue Plan Act of 2021, H.R. 1319—on March 10 without any minimum wage hike.  President Biden is expected to sign the bill into law on March 12.
  • On February 19, 2021, WHD announced the withdrawal of two Trump-era opinion letters—FLSA2019-6, addressing independent contractor status under the Fair Labor Standards Act, and FLSA2019-10, addressing the compensability of sleeping time for truck drivers.
  • On February 11, 2021, the Senate’s Health, Education, Labor, and Pensions (HELP) Committee approved President Biden’s nomination of Boston Mayor (and former union leader) Marty Walsh to U.S. Secretary of Labor. All of the Committee’s Democrats and seven of its eleven Republicans voted in favor.  The nomination now heads to the full (and Democratic-controlled) Senate, a majority of which is needed to approve the nomination.
  • The HELP Committee will hold a confirmation hearing for President Biden’s nominee for Deputy Secretary of Labor—current California Labor Secretary Julie Su—on March 16, 2021.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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