What To Count on In Labor And Employment Legislation Underneath The Biden Administration – Employment and HR

In November 2020, Littler’s Workplace Policy Institute (WPI)
published its Election Report, a deep dive into the myriad
labor and employment policy questions potentially in play depending
on the outcome of the election. The detailed report explored
possible outcomes depending upon the results of the presidential
election and congressional races. With the inauguration of
President-elect Joseph R. Biden, Jr. imminent and Democrats now
poised to take control of the Senate, WPI offers the following
insights on what may be expected on the labor and employment front
in the weeks and months to come.

A Historically Closely Divided Congress

As predicted in our Election Report, the question of which party
would control Congress (or whether control would be different in
the House and Senate) was not clear for weeks. In the immediate
aftermath of Election Day, Republicans held 50 Senate seats, with
48 seats in the Democratic column (including two Independent
senators, Bernie Sanders of Vermont and Angus King of Maine, who
align themselves and caucus with Senate Democrats). Both Senate
seats in Georgia remained in play, with no candidate getting a
majority of votes (as required under Georgia state law), and runoff
elections were held on January 5, 2021.

Democrat challengers Jon Ossoff and Raphael Warnock defeated
Republican incumbents David Perdue and Kelly Loeffler respectively,
bringing the balance of power in the Senate to an evenly divided
50/50 split. Under the U.S. Constitution, the Vice President of the
United States serves as President of the Senate, and casts a
tie-breaking vote when the Senate deadlocks. This means that once
the two Democratic senators from Georgia are seated, and former
California Senator Kamala Harris is inaugurated as Vice President,
she will become the tie-breaking vote, effectively giving control
of the Senate (including the powerful position of Senate Majority
Leader) to the Democrats (California Governor Gavin Newsom (D) has
tapped the state’s secretary of state, Alex Padilla (D), to
replace Harris in the Senate, maintaining the 50/50 balance).

Democrats saw a net loss of seats in the U.S. House of
Representatives, but will still maintain control, albeit with a
slim margin. The House currently comprises 222 Democrats and 210
Republicans, and several Democratic representatives will be leaving
the House to take positions in the Biden administration, narrowing
that margin even further.

These historically close margins in both chamber of Congress
mean that for any controversial or partisan legislation to pass, it
must enjoy the support of almost all congressional Democrats. While
legislation can be approved by the House with bare majority
support, things are more complicated in the Senate. Under current
rules governing the use of the filibuster, most legislation must
garner at least 60 votes to pass the Senate. It is unclear whether
the filibuster rules will be revisited to eliminate the 60-vote
requirement to pass legislation (as was the case for judicial and
executive nominations), and a number of Democratic senators have
indicated that at this time they do not support eliminating the
60-vote filibuster threshold. Only time will tell whether that
question is revisited.

The 50/50 split in the Senate means that key committees will
likely include an equal number of Democratic and Republican
senators, although chaired by the Democrat. While details of how
these “power-sharing” arrangements are still being
finalized, we expect that the Senate’s rules will include some
provision for bringing legislation from a deadlocked committee to
the Senate floor.

It is also possible to move certain legislation relating
directly to taxes and revenue through the Senate with a simple
majority through an annual process known as budget reconciliation.
The rules governing whether a given piece of legislation qualifies
for inclusion in reconciliation are arcane and complex, but in
general provide that a bill that is not directly related to tax and
revenue, but only produces an incidental budgetary effect, may be
stricken from any reconciliation package. Put more simply, policy
proposals that are not primarily budget-driven in nature are
unlikely to qualify for expedited budget reconciliation
treatment.

Finally, given the control of both houses of Congress, it is
possible that the Congressional Review Act (CRA) may be invoked to
repeal, among other things, labor and employment regulations
adopted in the late days of the Trump administration. Under the
CRA, a majority of both the House and Senate may vote to revoke key
rules and regulations adopted near the end of an outgoing
administration. If revoked by way of the CRA, a regulation is
deemed null and void, and importantly, the department that issued
the stricken regulation is prohibited from promulgating new
regulations on the topic that are “substantially similar”
to those repealed. To date, given the somewhat limited use of the
CRA, courts have not had the occasion to opine on what the contours
of that “substantially similar” prohibition.

Secretary of Labor

On January 7, 2021, President-elect Biden announced that he had
chosen Marty Walsh (currently the mayor of Boston, Massachusetts)
to be his nominee for U.S. Secretary of Labor. Walsh forged his
early career in the labor movement, serving as a union official and
ultimately leading Boston’s Building and Construction Trades
Council. In 2014, he was elected mayor of Boston, a position in
which he currently serves. Walsh’s nomination for labor
secretary was largely supported by organized labor, most notably
the AFL-CIO, and he is reported to be a close personal friend of
President-elect Biden. That said, although unabashedly pro-labor,
Walsh’s reputation is that of a consensus builder, and someone
willing to engage stakeholders on both sides of labor and
management.

The announcement of his nomination was lauded by the Greater
Boston Chamber of Commerce, which noted his “unique ability to
build bridges between labor and the business community.” A
date has not yet been set for Walsh’s confirmation hearing in
the U.S. Senate Committee on Health, Education, Labor, and
Pensions, but Walsh’s nomination is expected to ultimately
clear the Senate, potentially with some Republican support.

The U.S. Department of Labor (DOL) has significant regulatory
authority over matters ranging from workplace safety through the
Occupational Safety and Health Administration (OSHA) to the
classification of workers as employees or contractors under federal
wage and hour law. The DOL would also likely be charged with
administering any executive orders relating to labor and employment
policy issued by President Biden.

In addition to changes at the DOL, when the new administration
takes office, it will designate Democratic chairs of independent
agencies, such as the National Labor Relations Board and Equal
Employment Opportunity Commission. Notably, while these bodies will
now be chaired by a Democrat, both currently have Republican
majorities, and may continue to be Republican-majority for a
significant period of time.

Biden’s COVID-19 Stimulus Plan

It is likely that the first legislative business in the new
Congress will be additional economic relief to address the public
health and economic devastation wrought by the COVID-19 pandemic.
Prior to his inauguration, President-elect Biden released an outline of his proposed package of
COVID-19 stimulus relief, which includes a number of labor and
employment proposals. Some relate directly to the pandemic, while
others are more attenuated, and reflect long-standing Democratic
policy priorities. Key labor and employment provisions in
Biden’s COVID-19 proposal include:

• Expansion and extension of
  unemployment insurance (UI) benefits through September 2021,
  including a $400/week federally funded “add on” to UI
  benefits, and UI eligibility for self-employed workers and others
  not traditionally eligible for UI benefits under state unemployment
  law;
• Renewal of the emergency paid sick
  and family medical leave mandates contained in last year’s
  Family First Coronavirus Response Act (FFCRA), and expansion of the
  law to require employers with 500 or more employees to provide
  leave (as well as elimination of the exemption for employers with
  fewer than 50 employees contained in the prior law);
• Calling on employers to provide
  “generous” back hazard pay to frontline and other
  essential workers (the scope of this proposal, as well as whether
  and how any costs will be borne by the federal government, is not
  year clear);
• Asking Congress to authorize OSHA to
  issue a national COVID-19 protection standard, with coverage
  including public workers (typically not covered under OSHA rules),
  and additional funds for OSHA enforcement and grant programs;
  and
• Increasing the minimum wage to
  $15/hour nationally, and eliminating the tipped minimum wage and
  sub-minimum wage for certain workers with disabilities.

Beyond COVID-19: Labor and Employment Priorities

The president-elect’s COVID-19 response package offers some
clues as to issues likely to dominate the labor and employment
agenda beyond the pandemic response. For example, many speculate
that an increase in the federal minimum wage may not be included as
part of a COVID-19 response package, but that the issue is likely
to be given high priority for consideration in Congress on its own,
or in combination with other labor or employment measures.

Similarly, President-elect Biden will have at his disposal the
use of presidential executive orders, which have increasingly
become a preferred means of making policy for both Democratic and
Republican presidents when they are unable to move larger
initiatives through Congress. Upon his inauguration, the new
president is empowered to both repeal prior administration’s
orders and issue new ones. For example, it is widely expected that
in his first days in office, President-elect Biden will use
executive orders to revisit a number of his predecessor’s
policies concerning immigration. He is also likely to revisit Executive Order 13950, which sought to
regulate the content of diversity and inclusion training programs
used by federal contractors. While that order was enjoined nationally by a federal
court in December, we expect it will be formally repealed shortly
after the new administration takes office.

Employers doing business with the federal government should pay
special attention, as administrations of both parties have used
executive orders to impose restrictions and requirements on federal
contractors as a condition of doing business with the government.
The Office of Federal Contract Compliance Programs is generally
charged with administering these orders.

The call for renewal and expansion of the FFCRA temporary paid
sick and family leave requirements also suggests that the issue of
paid leave-whether in the form of sick leave, family/medial leave,
or other forms of paid time off-will likely be given close
attention in the next Congress. Incoming Chair of the Senate
Committee on Health, Education, Labor and Pensions (HELP Committee)
Patty Murray (D-WA) has long been a supporter of mandating that
employers provide workers with paid leave. Under her leadership, we
expect the HELP Committee will look closely at proposals to impose
leave mandates on a broad range of employers.

We also expect that an examination of federal wage and hour laws
relating to controversial matters such as employee/independent
contractor classification, joint-employer status, and the
sub-minimum wage for tipped employees, will be on the new
Congress’s agenda. In the prior administration, the DOL issued
a series of regulations relating to these matters. In January 2020,
the DOL revised its regulations regarding the circumstances under
which one employer can be deemed the “joint employer” of
another company’s workers under federal wage and hour law. That
regulation, which was enjoined by a federal district court last
fall, is likely to be revisited in the Biden administration.

Similarly, in January of this year, the DOL issued its final regulation regarding the classification of
workers as either employees or independent contractors under
federal wage and hour law. It is not clear if that regulation too
will be subject to legal challenge, or whether Congress will
attempt to repeal it by way of the CRA discussed above. As a
candidate, President-elect Biden expressed his strong support for
proposals to adopt the so-called “ABC test” for
determining whether a worker should be classified as an
“employee” for purposes of federal law. Under the ABC
test, many workers who currently are classified as independent
contractors would likely be re-classified as employees under
federal minimum wage and overtime laws.

Finally, we expect that the new Congress will give close
attention to efforts to reform the National Labor Relations Act
(NLRA). In the last Congress, the so-called “PRO Act”
passed the House, but stalled in the Senate. As detailed on pages
11-14 of WPI’s Election Report, the PRO
Act represents the most sweeping changes in federal
labor/management relations law in decades. Among its most sweeping
provisions, the PRO Act would:

• Expand the liability of “joint
  employers” under the NLRA to include companies that
  “indirectly control” another company’s workers;
• Dramatically limit the definition of
  “independent contractor” under the NLRA by way of the ABC
  test discussed;
• Revise the definition of supervisor
  under the NLRA such that fewer workers would be classified as
  supervisors and be ineligible to organize;
• Expand the scope of unfair labor
  practices, and increase penalties for NLRA violations; and
• Override state
  “right-to-work” laws adopted in more than half of U.S.
  states.

Given the controversial nature of many of these proposals, and
razor-thin margins in Congress, it is unlikely that the PRO Act
will be taken up entirely as written. Far more likely is that
certain provisions may be taken out of the bill and debated
separately, or attached to other labor and employment legislation.
As discussed in the Election Report, as control of the National
Labor Relations Board switches to Democratic (as is anticipated by
the end of the year), a new Board could address a number of these
items in its decisions and/or rulemakings.

Conclusion

While COVID-19 will continue to dominate the legislative and
policy landscape for the immediate future, it is clear that the new
administration and congressional Democrats will give significant
attention to labor and employment matters in the weeks and months
to come. The success of these efforts remains to be seen, but there
will surely be no shortage of debate and discussion of issues of
direct concern to all employers. Littler’s WPI will continue to
keep you apprised of developments as they occur.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.