January 25, 2021, by Sahar Shiralian
Joe Biden is now the 46th president of the United States and the transfer of power in the White House will bring a dramatic change in philosophy with respect to employment and labor policies. Now that Donald Trump has left office, employers can anticipate more labor oriented policies. For example, Biden’s campaign issued a comprehensive labor plan, “The Biden Plan for Strengthening Worker Organizing, Collective Bargaining and Unions,” in which he promised to “[e]ncourage and incentivize unionization and collective bargaining;” “[e]nsure that workers are treated with dignity and receive the pay, benefits, and workplace protections they deserve;” and “[c]heck the abuse of corporate power over labor and hold corporate executives personally accountable for violations of labor laws.”
Below is our attempt to look into the proverbial crystal ball to cast ten significant employment and labor law predictions under the Biden administration:
1. Increased Oversight on Independent Contractor Misclassification
Employers should expect the Biden administration to crack down on employers that intentionally misclassify employees as independent contractors. As part of his campaign platform, Biden stated that his administration was committed to vigorously enforcing existing laws against employers that intentionally misclassify employees as independent contractors. The Biden plan specifically endorses California’s ABC test to achieve this goal, which was already codified in California in 2019 and established a new test for independent contractor status.
If such federal legislation is passed, employers must meet a stringent standard to classify employees as independent contractors under the ABC test, which presumes that a worker is an employee and not an independent contractor unless three factors are satisfied: the worker is free from the control and direction of the employer in performing work (both contractually and in reality); the worker performs work outside the usual course of the employer’s business; and the worker is customarily engaged in an independently established business or trade of the same nature as the work being performed.
Biden has indicated that he will push for federal legislation that will permit the ABC test to be implemented on a national level, making it increasingly difficult for businesses to use independent contractors.
2. Bias Training and Affirmative Action
President Biden will likely repeal President Trump’s Executive Order 13950, “Combatting Race and Sex Stereotyping.” This Executive Order, issued on September 22, 2020, prohibits federal contractors and subcontractors from holding “workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” Among the training prohibited by the Executive Order is the concept that “an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously.” A guidance letter issued by the Office of Management and Budget on September 28, 2020 stated that prohibited trainings might be identified by searching the contents for terms such as “unconscious bias” and “systemic racism.” Advocacy groups filed suit in October to enjoin the Executive Order, arguing it “is an extraordinary and unprecedented act by the Trump administration to undermine efforts to foster diversity and inclusion in the workplace.” See National Urban League v. Trump, No. 1:20-cv-03121 (D.D.C. Oct. 29, 2020).
The Biden administration believes this executive order is at odds with efforts by many businesses to incorporate unconscious bias training and anti-racism policies in the workplace in response to recent police killings of Black Americans. It is likely that Biden will overturn Executive Order 13950. In fact, employers should expect new workplace training obligations regarding racism and diversity and a strong emphasis on Diversity, Equity, and Inclusion programs under the Biden administration.
3. Workplace Safety and Stronger COVID-19 Safety Measures
Biden has been very critical of the Occupational Safety and Health Administration (OSHA)’s current approach on combating COVID-19 in the workplace and the Trump administration’s reliance on existing statutory and regulatory tools, such as OSHA’s general duty clause, to maintain safe workplaces. Given that the pandemic is Biden’s top priority, employers should expect the Biden administration to push OSHA for more investigations and greater penalties for COVID-related violations. Biden will likely push OSHA for a mandatory emergency standard, which would require employers to develop and submit a workplace safety plan that requires government approval. Further, employers should expect the Biden administration to reinstate the Obama-era rule requiring employers to publicly disclose occupational illnesses and injuries at their workplaces, which is intended to motivate employers to comply with health and safety standards.
4. Pay Equity
Employers should also expect to see more pay equity legislation passed at the federal level. When Vice President Harris was running for president, she expressed that she was committed to working with Congress to enact legislation that would require private employers to certify pay parity between male and female employees.
In addition, the Paycheck Fairness Act in 2019, which lost traction in the Senate last year, may resurface in 2021. The bill aimed to address wage discrimination on the basis of sex and reduce the gender pay gap and would amend the Fair Labor Standards Act to (1) restrict the use of the “bona fide factor” defense to wage discrimination claims, (2) enhance non-retaliation prohibitions, (3) make it unlawful to require an employee to sign a contract or waiver prohibiting the employee from disclosing information about the employee’s wages, and (4) increase civil penalties for violations of equal pay provisions.
5. Wage and Hour Law
Employers should not be surprised to see a push for a $15 minimum wage on the federal level, a dramatic increase from $7.25 per hour. Biden’s campaign specifically promised an increase to $15 by the year 2026. Additionally, employers should keep an eye out for enhanced penalties and more enforcement actions for violations of wage and hour laws. It is likely that Biden will increase federal regulation designed to protect workers such as a national wage theft protection act, which could include both notice and recordkeeping requirements.
6. Employee Benefits
Biden has pledged a commitment to expanding the Affordable Care Act (ACA) and building on other aspects of the ACA – specifically, with “Bidencare,” which he contends will give individuals more choice, reduce health care costs, and make health care easier to navigate. In addition, Biden has promised to preserve pre-existing condition guarantees regardless of the Supreme Court’s expected ruling on the ACA in the spring of 2021.
7. Employee Leave
Recently, Joe Biden unveiled the American Rescue Plan, which included a sneak peek for employers into the new administration’s plan for paid leave. Biden intends to expand covered employers and eligible employees and increase the amount of leave available to employees. Further, it is expected that smaller employers with less than 500 employees will be reimbursed for the cost of paid leave.
8. Restrictive Covenants
Employers should also anticipate a federal push to limit the use of restrictive covenants (non-compete agreements) because they can be perceived as impeding employee mobility at a time when the nation’s unemployment rate has increased. In fact, Joe Biden’s “Plan for Strengthening Worker Organizing, Collective Bargaining, and Unions” specifically states that he aims to “eliminate non-compete clauses and no-poaching agreements that hinder the ability of employees to seek higher wages, better benefits, and working conditions by changing employers.”
9. Employee Privacy and Data Security
Employers will likely also need to add new privacy laws on their compliance checklist under the Biden administration. Consumer privacy was a priority for Vice President Harris when she was California’s Attorney General, and it is expected that the Biden administration will borrow key aspects of the stringent California Consumer Privacy Act (CCPA) and usher in federal legislation that will require greater transparency and data access requirements for many businesses. As a result, many employers may be required to reconsider how they store and use the personal data of their employees.
10. Encouragement of Union Organizing
Last, Biden has repeatedly promised to use his authority over federal contractors to re-impose Obama-era rules relating to union organizing. In addition, he will likely revive the “Fair Pay and Safe Workplaces” order, which is an Obama-era rule requiring contractors to disclose labor relations and employment-law violations, and the Obama-era rule expediting union elections. Biden will also likely reverse Trump-era precedent that restricts employee access to company email and communications systems for union-organizing efforts.