Each week during the first 100 days of the new administration, we will provide a recap of significant initiatives and events that will impact employers.
In week ten, the Biden administration’s labor and employment activity includes the Senate confirmation of Marty Walsh as Labor Secretary, the nomination of former CEO of the Democratic National Committee to the Solicitor of Labor, and the Department of Labor’s reworking of rules governing tipped workers.
Senate Confirmation of Marty Walsh as Labor Secretary
The Senate confirmed Marty Walsh as the Secretary of the Department of Labor by a 68-29 vote on March 23. Walsh, a labor-friendly former Mayor of Boston, has advocated for a $15 hourly federal minimum wage and supports the controversial pro-labor Protecting the Right to Organize Act (PRO Act), still pending in Congress.
What’s to come: We anticipate that Walsh will pursue an aggressive regulatory and compliance agenda that will impact employers including imposing increased employment and labor related obligations on federal government contractors, issuing new workplace safety standards through OSHA, and rolling back Trump-era regulatory guidance and DOL rules affecting joint employment, contractor status, and tipped wages (see more on this below). The anticipated changes will greatly increase the regulatory burden on employers.
Biden Nominates former DNC CEO, Seema Nanda, as Chief Lawyer for DOL
The White House announced the selection of Seema Nanda as Solicitor of Labor, the DOL’s chief legal role. Nanda worked both as deputy solicitor and chief of staff at DOL during the Obama administration and later worked as the CEO of the Democratic National Committee.
What’s to Come: Nanda is the only Biden nominee to DOL leadership nominee who brings with her previous DOL experience. Walsh comes to his post from organized labor and municipal government, and Su comes from California’s labor agency. We anticipate that Nanda’s familiarity will expedite implementation of Walsh’s pro-labor agenda, as Walsh has made clear his priority is to build a fairer economy that “works for everyone,”
DOL Targets Trump Measure Allowing Lower Minimum Wage to Tipped Workers
The DOL has announced that it will permit some aspects of President Trump’s “tipped worker” rule to take effect while continuing to delay other provisions.
Specifically, the following aspects of the tipped worker rule will take effect on April 30, 2021:
- Employers, including specifically supervisors and managers, are prohibited in sharing tips received by workers, regardless of whether the employer takes a tip credit.
- If the employer does not take a tip credit, it may allow non-tipped workers such as cooks or dishwashers, to share in a mandatory tip pool.
- If non-tipped workers share in a tip pool, new recordkeeping obligations apply. In addition to the normal payroll information and data already required of employers, employers must also retain the following:
- A symbol, letter, or other notation placed on the pay records identifying each employee who receive tips.
- Weekly or monthly amount reported by the employee, to the employer, of tips received (this may consist of reports made by the employees to the employer on IRS Form 4070).
Delayed are provisions of the rule that restrict DOL’s ability to assess penalties against employers who violate the FLSA’s tipping rules and also permit employers to pay a subminimum tipped wage for side tasks that don’t directly lead to tips, like setting up and breaking down before and after a shift.
What’s to Come: In the news release announcing the changes, Wage and Hour Division Deputy Administrator Jessica Looman stated, “Tipped workers are among those hardest hit amid the pandemic, and the Wage and Hour Division has made protecting these essential frontline workers a priority. The proposals we announced today ensure that we consider all of the circumstances in today’s rapidly changing workplace. These essential workers deserve our careful and thoughtful consideration as we craft and implement rules that affect their well-being.” As the administration has committed to enhanced worker protections, we can anticipate seeing additional measures addressing employee issues, including safety, to come in the near future.