Change is In the Air – L&E Under The Biden-Harris Administration

Kelley Drye & Warren LLP
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On January 20, 2021, Vice President Joseph R. Biden Jr. will be sworn in as the 46th President of the United States. Whichever side of the political spectrum you fall on, there can be no question that this is going to signal changes – and not all of them positive – for employers. For all the tumult of the Trump years, the current administration has helped create an unquestionably employer-friendly environment, largely by rolling back many Obama-era labor priorities, from union organizing to changes in independent contractor law.

Whatever their political orientation, businesses are cautiously eyeing a Biden-Harris administration for signs of “Obama redux,” or perhaps an even more aggressive labor agenda, particularly in the form of Executive Orders from a Democratic administration energized by (or careful to placate) its more progressive elements.

Biden’s actual legislative opportunities in Congress are far more uncertain and run from modest to expansive, largely depending on the results of Georgia’s U.S. Senate runoff elections on January 5, 2021. If Republicans keep control of the Senate, employers should expect more gridlock in Washington. That kind of stalemate may well result in the exact reaction some state legislatures had to Trump: more progressive employment legislation at the state and local levels. But with Executive Orders remaining, recent Presidents’ weapon of choice (a trend for which Trump became known but which, ironically, was ushered in by Obama himself), employers can also expect a Congressionally stymied Biden-Harris administration to compensate with more of the same. We don’t have to look far for evidence of these plans: for example, Biden has already committed to rescinding President Trump’s Executive Order 13950, which directed federal contractors to refrain from conducting diversity and inclusion training.

Other predictions include the following:

Coronavirus

President-elect Biden campaigned on shutting down the coronavirus, not the economy. Employers can expect his administration to issue workplace safety rules for employers to follow on a national level to protect workers from exposure to the virus. The new president could implement these rules quickly even without Senate confirmed leadership at the Labor Department or OSHA.

Expanded family leave and emergency paid sick leave under the Families First Coronavirus Response Act (FFCRA) will expire on December 31, 2020. During the campaign, President-elect Biden indicated that he would support: (1) expanding the additional $600 per week in federal unemployment benefits that expired in July 2020, and (2) an extension of emergency paid sick leave and family medical leave under the FFCRA. Biden would likely support a bill that would make these benefits available to both employees and part-time workers, gig workers, and independent contractors. Senate Republicans favor the inclusion of valuable liability protections for businesses. In the event Senate Republicans keep control of the Senate, President-elect Biden may support a compromise bill with both benefits for employees and employers (for employers making a good faith effort to comply with COVID safety measures).

Additionally, President-elect Biden supports 12 weeks of paid leave for all workers to care for their newborns, newly adopted or fostered children, for their own or a family member’s serious health condition, or to care for injured service members or deal with “qualifying exigencies arising from the deployment” of a family member in the Armed Services.

Misclassification – Employee vs. Independent Contractor

The ping pong that has gone on over the legal definition of an “employee” will likely continue, as President-elect Biden has committed to “work with Congress to establish a standard modeled on the ABC test for all labor, employment, and tax laws.” (The “ABC” test finds its origins in California state law, most clearly embodied in 2020’s Assembly Bill 5, or “AB5,” which is shorthand for “almost impossible to classify workers as independent contractors.”)

Whether the Biden-Harris administration can actually deliver on its promise of legislative action with respect to independent contractor misclassification remains to be seen. However, President-elect Biden’s invocation of California’s ABC test is a strong signal that his administration will ramp up enforcement action designed to root out independent contractor misclassification.

National Labor Relations Board

While a Republican-controlled Senate is unlikely to pass union friendly legislative proposals, President-elect Biden will place individuals on the National Labor Relations Board who share his pro-union views, and who are likely to overrule many of the precedents issued during the Trump administration and who will revive the Obama-era rules expediting union elections, requiring contractors to agree to be neutral with respect to union organizing, and impose a version of the “Fair Pay and Safe Workplaces” order.

OSHA

Similarly, a Biden-Harris administration will likely include the reinstatement of the Obama-era rule requiring employers to publicly disclose occupational illnesses and injuries at their workplaces, which is intended to incentivize compliance with health and safety standards.

Pay Equity

When Vice President-elect Kamala Harris was herself a presidential hopeful, she revealed her intention to make the U.S. a worldwide leader in the fight for pay equity. If Republican control in the Senate remains, it is unlikely that the Biden administration could push through Congress any pay equity legislation imposing significant burden on private employers. However, pay parity standards for federal contractors are likely along with the resuscitation of the Obama-era requirement that pay data be disclosed by employers on EEO-1 reports and a directive to the OFCCP to aggressively enforce prohibitions on wage discrimination by federal contractors.

Arbitration

If the Democrats gain control of the Senate, employers can expect Biden to sign the Forced Arbitration Injustice Repeal (“FAIR”) Act, which is legislation that would prohibit employers from requiring employees to sign pre-dispute arbitration agreements as a condition of employment. If Republicans maintain their Senate majority, the FAIR Act will be blocked in the Senate.

Immigration

The Biden Administration is expected to make it easier for businesses to use immigration to strengthen their businesses.

Minimum Wage

President-elect Biden previously called for a $15 federal minimum wage. The Biden Administration also will seek to eliminate the reduced minimum wage for tipped employees (i.e., the tip credit) and likely will seek an increase in the minimum salary to qualify as an exempt employee under the FLSA.

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So what’s the upshot? Employers can expect a Biden-Harris administration that is much more worker-friendly than the current administration. Without a Democratic majority in the Senate, don’t expect any groundbreaking labor and employment legislation. Instead, stay focused in the next four years on what made the last four years such a rodeo for employers trying to stay in compliance – a patchwork of Executive Orders, and state and local laws that vary widely from jurisdiction to jurisdiction. As for what might happen if Democrats gain a slim majority in the Senate – check back with us on January 6, 2021.

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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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