New Administration, New Labor Laws: An Overview for 2021 and Beyond

Cohen Seglias Pallas Greenhall & Furman PC
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President-elect Joseph Biden campaigned on a robust platform of labor and employment legislation. With a 50-50 split in the Senate, Vice President-elect Kamala Harris can be expected to break any ties on the Senate floor. Employers should expect some key workplace policy changes from the new presidential administration, covering labor’s rights to organize, joint employment, misclassification, COVID-19 responses, and employment contracts.

Pro-Labor Platform

President-elect Biden is a vocal supporter of the Protecting the Right to Organize (PRO) Act, a legislative bill designed to overhaul current labor laws through amendments to the National Labor Relations Act (NLRA). The PRO Act seeks to strengthen union organizing through significant changes to current representation election rules. Other key provisions of the PRO Act include:

  • Legalization of secondary boycotts
  • Enhancement of striker protections, including a ban on the use of replacement workers
  • The imposition of collective bargaining agreements (CBAs) where no agreements exist
  • Creation of a private cause of action for labor law violations
  • Adoption of worker-friendly tests to identify joint employers and distinguish between employees and independent contractors
  • Ban on right-to-work laws

The PRO Act was first introduced by Congressional Democrats in 2018 and reintroduced each year since without success. Under current Senate rules requiring 60 votes to overcome a filibuster, the bill will likely face the same fate in 2021. However, the Biden administration will still be able to implement some pro-labor policies through executive orders, appointments to leadership at the National Labor Relations Board (NLRB), and pro-union NLRB rulemaking. Executive actions will likely include:

  • Revival of an Obama-era rule expediting union elections
  • Reversal of Trump-era precedent restricting employee access to company communications systems for union-organizing
  • Re-imposition of Obama-era rules requiring contractor neutrality
  • Reinstatement of Obama-era rules mandating employer disclosure of labor relations and employment law violations

Minimum Wage

President-elect Biden has repeatedly spoken out in favor of raising the federal minimum wage to $15.00 per hour. With control of the Senate, Democrats are likely to have enough support to pass a bill implementing incremental increases to the current federal minimum wage of $7.25 per hour.

Joint Employers

When a joint employment relationship exists, two or more employers can be held liable for labor law violations under the NLRA and wage and hour violations under the Fair Labor Standards Act (FLSA). The PRO Act would broaden the scope of individuals and entities recognized as joint employers for NLRA liability purposes. However, the new administration can avoid the need for new legislation and expand the definition of “joint employer” through administrative interpretations of existing laws by the NLRB, the agency responsible for interpreting the NLRA, and the Department of Labor (DOL), the agency responsible for enforcement of the FLSA.

Misclassification

Misclassification issues arise when employers incorrectly classify employees as independent contractors and, as a result, fail to comply with workplace laws that cover employees, such as the FLSA and NLRA. During his campaign, President-elect Biden expressed support for narrowing the scope of workers that can be properly classified as independent contractors, increasing funding for DOL investigators to target misclassifying employers, and increasing employer penalties for misclassification. He also expressed support for provisions of the PRO Act that would narrow the definition of “independent contractor” for purposes of NLRA litigation.  Since then, the DOL issued a new final rule broadening the definition of “independent contractor” for purposes of FLSA liability. The final rule is scheduled to take effect on March 8, 2021. At this point, it is unclear whether the Biden administration will push for rescission of the rule before then. Most likely, DOL appointees will postpone the effective date of the rule while the new Presidential administration decides how to respond. Employers should anticipate that NLRB appointees will issue guidelines that mirror the DOL’s policies.

Employers should note that many states have their own independent contractor laws. For example, the Pennsylvania Misclassification Act (Act 72) establishes an extraordinarily broad definition of “independent contractor,” similar to the definition set forth in the PRO Act. Act 72 applies only to the construction industry for purposes of workers’ compensation, unemployment compensation, and worker classification.

COVID-19 Response and Paid Leave

Throughout his campaign, President-elect Biden committed to taking a more active role in the nation’s response to COVID-19. He said he will push the Center for Disease Control and Prevention (CDC) to issue evidence-based guidance on the opening and closing of businesses. Employers can expect to see such guidance incorporated into administrative rules by the NLRB, DOL, and Occupational Safety and Health Administration (OSHA). Employers should expect increased investigation and penalties for COVID-19-related violations of workplace safety laws.

Additionally, President-elect Biden has vocally supported the extension and expansion of the Families First Coronavirus Response Act (FFCRA), which expired on December 31, 2020. The FFCRA required covered employers to provide employees with paid sick leave and expanded family and medical leave for certain COVID-19-related reasons. On December 22, 2020, Congress passed a pandemic relief bill that made COVID-19-related leave voluntary. The relief bill extended the tax credit available to employers offering COVID-19-related leave but did not extend the FFCRA’s leave mandate.  President-elect Biden is expected to announce his multi-trillion-dollar stimulus plan this week, which may renew the FFCRA’s family and medical leave mandate. Regardless, employers should expect to see a push for a more permanent federal leave mandate from the Biden administration. During his campaign, President-elect Biden expressed support for up to 12 weeks of paid federal family and medical leave. The Biden administration will most likely seek to implement a paid leave mandate through legislation amending the Family and Medical Leave Act (FMLA).

Employment Contracts

Employers should expect to see challenges under the Biden administration to two common employment contract clauses: non-competes and arbitration agreements. The Biden platform calls for a prohibition on all non-compete clauses except those deemed absolutely necessary to protect certain trade secrets. Although a legislative ban is unlikely to get through the Senate, the Biden administration can implement this policy through a Fair Trade Commission (FTC) rule banning non-compete clauses as unfair methods of competition.

President-elect Biden has also expressed his support for the Forced Arbitration Injustice Repeal (FAIR) Act, a bill that would prohibit employers from forcing employees to sign pre-dispute arbitration agreements as a condition of employment. The FAIR Act has already passed the House and, with Democrats in control, is expected to pass the Senate.

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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