With the inauguration of a new President come significant anticipated changes in many areas of business, but none more seismic than in labor, employment and immigration. As President, Joe Biden plans to launch an ambitious labor, employment and immigration agenda, ranging from adopting a national $15 per hour minimum wage; to ensuring the advancement of racial equity and LGBTQ equality through enhanced enforcement of workplace discrimination laws; to expanding employment-based immigration visas and guest worker programs; to ending controversial asylum policies and modernizing America’s immigration system; to repealing the ability of states to implement right-to-work laws.
The likelihood of these and other reforms hyped by the Biden campaign throughout the election season occurring is now much higher in light of the Democrats’ victories in the recent U.S. Senate run-off races in Georgia, which secured the party a 50/50 divided Senate – with Vice President Kamala Harris having the tiebreaking vote. Even beyond Congressional action, however, Biden’s new agenda will be crafted and advanced through the President’s cabinet picks and agency appointees, his issuance of Executive Orders and his repeal of Trump Executive Orders. Some of these actions could be taken on day one, while others may only begin to take root during Biden’s first year in office. The following is a summary of what labor, employment and immigration changes employers can expect from the Biden Administration.
LABOR & EMPLOYMENT
Wage and Hour
- Changes to Independent Contractor Test – Throughout his campaign for President, Biden advocated for employment status for “gig economy” workers, emphasizing that the misclassification of gig workers as independent contractors prevents them from receiving many legal benefits and protections. In doing so, Biden has supported the use of a three-prong “ABC test” to distinguish employees from independent contractors, which presumes that a worker is an employee and not an independent contractor unless three factors are satisfied: (1) the worker is free from the control and direction of the employer in performing work (both contractually and in reality); (2) the worker performs work outside the usual course of the employer’s business; and (3) the worker is customarily engaged in an independently established business or trade of the same nature as the work being performed.[i]
In contrast, the Trump Administration’s U.S. Department of Labor (DOL) issued a final rule on January 7, 2021 emphasizing the “economic realities” test, wherein the primary question is whether an individual is economically dependent on someone else’s business (an employee) or is essentially in business for herself (an independent contractor). For more information on the shifting rules regarding the (mis)classification of independent contractors, read our recent alert on the subject here.
- Rejection of Trump’s Proposed Joint Employer Test – The Biden-Harris campaign promised a likely withdrawal of the rule that was proposed by the DOL in 2019, which would narrow the standard by which a company can be deemed a “joint employer” of an employee for the purposes of establishing liability. Proposed in the spring of 2019, the Trump DOL's four-part test for joint employer status was a rebuke of Obama-era DOL guidance and already has been struck down by at least one federal judge as “arbitrary and capricious.” [ii] The Biden Administration likely will resurrect the Obama-era guidance – which potentially makes more businesses liable for failures by franchisees or contractors to pay overtime or minimum wages – and Biden’s DOL can move almost immediately to thwart the Trump rule by simply opting not to defend it in court.
- Minimum Wage Increase – As Vice President, Biden previously called for a $15 per hour federal minimum wage and, as President, is likely to support further efforts to increase the federal minimum. While many cities and states have already established higher minimum wage rates than the current federal minimum of $7.25 per hour, a federal minimum wage of $15 per hour would set a new “floor” for employers in all jurisdictions. (Reminder to Virginia employers – the Commonwealth’s minimum wage increases from $7.25 to $9.50 on May 1, 2021, barring any additional delays by its legislators.) Biden also has indicated that he will seek to eliminate the reduced minimum wage for tipped employees (i.e., the “tip credit”) and to end the exception to the current minimum wage standards for certain farm and domestic workers.
- Higher Salary Thresholds for Overtime Exemptions – The Biden Administration likely will also seek an increase in the minimum salary required to qualify an employee as exempt from overtime under the FLSA, by introducing new overtime rules increasing the minimum threshold salary for white collar exemptions under the FLSA's "salary level test." Biden is expected to take a measured approach to this change, and any proposed increases will require a formal notice and comment period before any new rules could take effect. Previously, the Obama Administration proposed raising the minimum salary for an employee to be exempted from overtime to more than twice the pre-2016 rate of $23,660, equaling $47,476. Under Trump, the DOL issued a final rule in 2019 that raised the minimum threshold halfway toward that goal, to $35,568 per year (or $684 per week), which has been in effect since January 1, 2020.
- Civil Rights Advocates to Lead Enforcement Agencies – President Biden’s picks to lead the U.S. Department of Justice (DOJ) include Judge Merrick Garland for Attorney General, who is a former Obama nominee for the U.S. Supreme Court, and Vanita Gupta for Associate Attorney General, who previously led the civil rights division for the Obama-era DOJ and would be the first woman of color to serve in the role. To lead the civil rights division, Biden picked Kristen Clarke, a civil rights attorney and advocate. These nominees reiterate Biden’s position stated throughout his campaign that he considers equal protection under the law, regardless of race, to be essential. In addition, the U.S. Equal Employment Opportunity Commission (EEOC) is expected to emphasize discrimination and prioritize the workplace rights of LGBTQ employees under the Biden Administration. Although Biden can name a Democrat to lead the EEOC, the current members who were appointed by Trump will remain on the Commission until their terms expire or they resign. The commission's members currently include three Republicans (Chair Janet Dhillon, Vice Chair Keith Sonderling and Commissioner Andrea Lucas) and two Democrats (Commissioners Charlotte Burrows and Jocelyn Samuels), and Republicans will hold a 3-2 majority on the Commission through at least 2022.
- Focus on Racial Equity – In the Biden Plan to Build Back Better by Advancing Racial Equity Across the American Economy plan, Biden describes how his plan to “build back better” will require “rooting out discrimination in the workplace so people can earn what they deserve, support their families, and build wealth.”[iii] In his plan, President Biden has committed to narrowing the historic wealth gaps disproportionately impacting Black and Brown Americans, and to challenge discriminatory pay practices. He also will take action to strengthen the ability of employees to challenge discriminatory pay practices and to hold employers accountable.
In addition, in line with President Biden’s campaign promises to strengthen equal employment opportunities, he has promised to act quickly to overturn President Trump’s controversial Executive Order 13950, “Combatting Race and Sex Stereotyping.” Trump’s Executive Order, discussed in detail in our September 28, 2020 alert, prohibits federal contractors and subcontractors from holding workplace trainings that “inculcate” “any form of race or sex stereotyping or any form of race or sex scapegoating” – a broad prohibition that has garnered sharp criticism for essentially banning diversity trainings that discuss systemic racism or that involve the concept of white privilege.
- Advancement of LGBTQ Protections – President Biden has promised to make employment protections for LGBTQ workers a top legislative priority in his first 100 days through the enactment of the Equality Act for federal workers, which advances the EEOC’s stance that Title VII prohibits discrimination in employment on the basis of sexual orientation and gender identity. This position also was taken by the majority in the United States Supreme Court’s 2020 decision in Bostock v. Clayton County, Georgia.[iv]
Biden also has pledged to overturn President Trump’s “Transgender Military Ban,” stating that he will direct the Department of Defense to allow transgender service members to serve openly and to receive any necessary medical treatment.[v]
- Pro-Union Advocate to Lead DOL – President Biden has been a staunch supporter of organized labor throughout his political career, a fact that was reiterated by Biden’s choice for Secretary of Labor, Boston Mayor Marty Walsh. Walsh, a long-time labor advocate and former union leader, will succeed former corporate employment attorney Eugene Scalia, whom labor unions have often criticized for being too pro-employer. Walsh’s nomination has been applauded by labor and worker-safety advocates, and signals Biden’s intention to give workers’ interests a prime seat at his policymaking table.[vi]
- Appointment of Majority of NLRB Members – At present, there is one open seat on the National Labor Relations Board (NLRB), and another opening is expected in August 2021. A Biden NLRB is likely to bring back many Obama-era regulations, including the reinstatement of the NLRB’s standard in Purple Communications, a 2014 decision which requires that employees be permitted to use work-provided email accounts to engage in activities protected under Section 7 of the National Labor Relations Act.[vii]
- Support for PRO Act – Biden has voiced wide support for the Protecting the Right to Organize (PRO) Act, which would significantly strengthen unions by banning mandatory “captive audience” group meetings; preempting states’ “right to work” laws; and expanding personal liability for unfair labor practices for corporate directors and officers. The PRO Act would also allow a private right for unfair labor practice claims to be brought as civil actions, and it would add fines and liquidated damages as penalties for unfair labor practices.[viii]
Biden’s campaign promised to undo several Trump Administration policies, modernize America’s immigration system, welcome immigrants into communities, reassert a commitment to asylum-seekers and refugees, and tackle root causes of irregular immigration.[ix] These policy shifts will significantly impact not only family-based and asylum/refugee-based immigration, but also employment-based immigration, into the United States. Whereas comprehensive immigration reform is likely to remain challenging, more immediate efforts to initiate immigration policy changes by Executive Order should be expected during the first 100 days of the Biden Administration. One thing that is certain is that, however President Biden proceeds, the actions of his Administration will be affected by the COVID-19 pandemic.
The First 100 Days
As is stated above, significant immigration law changes are likely to impact employers in 2021, largely through the President’s cabinet picks and agency appointees, and through the issuance of executive orders. Examples of such changes are as follows:
- Expansion of Legal Immigration – President Biden announced plans to ask Congress immediately to offer a path to legal status for millions of undocumented immigrants, reform the current program for temporary seasonal workers, and otherwise expand legal immigration. In this regard, the Biden Plan states that he “will support expanding the number of high-skilled visas and eliminating the limits on employment-based visas by country, which create unacceptably long backlogs.” Biden also has pledged to create a roadmap for undocumented immigrants to achieve legal status and, eventually, citizenship if they register, are up-to-date on taxes, and pass a background check. The exact details of how this will be accomplished remain to be seen and likely will be hotly debated, and, more practically, these objectives likely will also be delayed by the COVID-19 pandemic.
- The Future of Travel Restrictions – Biden has indicated that, on his first day in office, he intends to rescind the travel ban on several predominantly Muslim countries. It is unclear how the pandemic will impact the rollback of such restrictions; however, it is likely that Biden will leave in place the pandemic-related travel restrictions while rescinding other Trump visa proclamations.
- Appointment of Pro-Immigration Secretary of Homeland Security (“DHS”) – President Biden will seek to confirm Alejandro Mayorkas, nominee for homeland security secretary. In addition to being the first Latino and immigrant to lead DHS, Mayorkas is also an experienced veteran from the Obama-Biden administration who served as director of U.S. Citizenship and Immigration Services (“USCIS”) from 2009 to 2013 and then as deputy secretary of DHS from 2013 to 2016. As the leader of a 240,000-person agency, it is anticipated that he will be critical to implementing President Biden’s pro-immigration policies.
- Potential for Easing of Adjudications – On a more practical and more immediate note, it remains to be seen if the Mayorkas appointment will start the process of easing and stabilizing adjudication standards for USCIS cases and visa requests. Many anticipate such easing with actions such as the elimination of the executive order that removed giving deference to prior USCIS decisions.
- H-1B Program: Challenges and Changes – With the Trump administration having modified the H-1B visa lottery process this past week in favor of allocating H-1B specialty occupations visas according to the highest salary offered, employers have been left to speculate about whether President Biden may reverse this decision. With the new system not going into effect until March, the incoming Biden administration has the opportunity to delay or change the H-1B selection process to restore the prior system, which did not prioritize H-1B cap-subject petitions based on wage levels, but, instead, used a random lottery process. In addition to the question of modifying the H-1B visa lottery, there is also the issue of increasing wages to start in July 2021. Given that the Biden Plan states that he “will work with Congress to first reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages,” it is unclear whether he will address these H-1B issues in 2021.
- Reversal of the Public Charge Rule – The Biden Plan expressly refers to the reversal of the public charge rule. According to Biden, doing so will end the practice by which immigration officials make an individual’s ability to receive a visa or gain permanent residency “contingent on their use of government services such as SNAP benefits or Medicaid, their household income, and other discriminatory criteria…”
- Ongoing Delays Caused by the COVID-19 Pandemic will Continue – Notwithstanding President Biden’s inauguration, one certainty is that consular closures and lengthy delays will continue unless and until the COVID-19 pandemic eases or subsides.
Longer-Term Immigration Reform
Longer-term immigration reform will rely on Congressional action. Even with the Democratic victories in Georgia's Senate runoffs, without enough votes to end a filibuster, comprehensive immigration reform likely will be a challenge. Going forward, however, look for the following changes in policy direction and tone:
- Changes to Asylum Policies – Some of the most controversial policy changes by the Trump Administration have related to asylum and the southern border. It is clear that Biden has pledged to end many of these policies. However, with the possibility of renewed migration from Central America in anticipation of an easing of asylum restrictions, Biden's plans may wait and/or evolve, especially if the COVID-19 pandemic is prolonged. The pandemic could also delay Biden’s promise to end the "Remain in Mexico" program (i.e., the Migrant Protection Protocols), which is the Trump administration's policy requiring migrants to wait in Mexico until they can attend their U.S. immigration court proceedings.
- DACA, TPS and the DV Lottery – Whether through executive order or other action, it is likely that Biden will reinstate protections for certain unauthorized immigrants who were brought to the U.S. as children, known as the DACA program. Biden also has pledged to review the Temporary Protected Status (“TPS”) program and to preserve the Diversity Visa Lottery (“DV Lottery”).
In summary, from President Biden’s first few days in office, employers should expect swift reversals of many of President Trump’s Executive Orders, and they should plan for various legislative and administrative reforms in the longer term that largely will favor the interests of employees. With the assistance of skilled legal counsel, employers should be prepared for these upcoming changes – which could signal a major and immediate shift in U.S. labor, employment and immigration policy.
[i] See Equality Act, H.R. 5, 116th Cong. (2019).
[ii] See New York v. Scalia, 1:20-cv-01689-GHW (S.D.N.Y. Jun. 1, 2020).
[iii] See The Biden Plan to Build Back Better by Advancing Racial Equity Across the American Economy, BIDEN FOR PRESIDENT (2021), https://joebiden.com/racial-economic-equity/ (last visited Jan. 12, 2021).
[iv] Bostock v. Clayton Cty., Georgia, 140 S. Ct. 1731 (2020).
[v] See The Biden Plan to Advance LGBTQ+ Equality in American and Around the World, BIDEN FOR PRESIDENT (2021), https://joebiden.com/lgbtq-policy/ (last visited Jan. 12, 2021).
[vi] See The Biden Plan for Strengthening Worker Organizing, Collective Bargaining, and Unions, BIDEN FOR PRESIDENT (2021), https://joebiden.com/empowerworkers/ (last visited Jan. 13, 2021).
[vii] See Purple Commc'ns, Inc., 361 N.L.R.B. No. 126 (2014).
[viii] See Protecting the Right to Organize Act of 2019, H.R.2474, 116th Cong. (2019), https://www.congress.gov/bill/116th-congress/house-bill/2474/text (last visited Jan. 13, 2021).
[ix] See The Biden Plan for Securing Our Values as a Nation of Immigrants, BIDEN FOR PRESIDENT (2021), https://joebiden.com/immigration/ (last visited Jan. 14, 2021) (the “Biden Plan”).