Actions Biden Has Already Taken that Impact Employers

By Skoler Abbott

February 11, 2021

On Wednesday, January 20, President Joe Biden was sworn into office, and, as anticipated by our colleague Amelia Holstrom in her blog found here, the Biden administration has swiftly moved to sign several executive orders, make top-level executive appointments, and reaffirm their stances on future policies that will significantly impact employers.

Here are actions Biden has already taken so far.

Preventing Discrimination on the Basis of Gender Identity and Sexual Orientation

President Biden signed off on an Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. This Executive Order (EO) reiterates the U.S. Supreme Court’s decision in Bostock v. Clayton County (2020), which found that discriminating against a person due to their sexual orientation or gender identity is prohibited by Title VII of the Civil Rights Act as it is discrimination based on someone’s sex. (You can read about that decision on our blog here). The EO requires that all federal agencies interpret Title VII of the Civil Rights Act as prohibiting workplace discrimination on the basis of sexual orientation and gender identity.

This Order also directs federal agencies to take all lawful steps to make sure that federal anti-discrimination statutes that cover sex discrimination prohibit discrimination on the basis of sexual orientation and gender identity, protecting the rights of LGBTQ+ persons. This will mandate LGBTQ inclusion in discrimination rules across housing, education, healthcare and other areas of the private sector, under federal law. However, the implications should not affect Massachusetts employers drastically as the state has had laws in place to prohibit discrimination based on sexual orientation and gender identity for many years.

Worker Health and Safety Changes

President Biden signed a separate EO on Protecting Worker Health and Safety, which orders the Occupational Health and Safety Administration (OSHA) to take swift action to issue guidance and possible mandates for safety protocols during the COVID-19 crisis. Pursuant to the EO, among other things, the Secretary of Labor (SOL), through the director of OSHA, had until February 4, 2021, to:

- Revise guidance to employers on workplace safety during the COVID-19 pandemic;

- Consider whether emergency temporary standards on COVID-19 (e.g., wearing masks in the workplace) are necessary, and, if so, to issue said mandates by March 15, 2021;

- Launch a program to focus OSHA enforcement efforts related to COVID-19 for violations that put the largest number of workers at serious risk or are contrary to anti-retaliation principles; and

- Create a coordinated effort to conduct a multilingual outreach campaign to inform workers and their representatives of their rights under applicable law

The EO also directs the Department of Labor (DOL) to work with department heads to explore measures to protect workers who are not covered by OSHA.

In response to the EO, OSHA released updated COVID-19 guidance on January 29, 2021.  The guidance suggests, among other things, that employers do the following:

- Assign a workplace coordinator who will be responsible for COVID-19 issues on the employer’s behalf;

- Identify where and how workers might be exposed to COVID-19 at work;

- Identify measures to limit the spread of COVID-19, including installing barriers, requiring face coverings, and utilizing remote work;

- Establish a communication system to ask workers about COVID-19 symptoms in a language they understand;

- When possible, allow those who test positive to telework;

- Provide guidance to employees on screening and testing consistent with state and local guidance; and

- Set up an anonymous system for workers to raise concerns about COVID-19 related hazards in the workplace without fear of retaliation;

Although the guidance is not mandatory, we anticipate that OSHA will draft and implement an enforceable COVID-19 rule echoing this guidance at some point in the near future.

Regulatory Changes Affecting Employee Classification and Guidance Issued by DOL

Upon assuming office, President Biden released a “regulatory freeze” memorandum to all heads of the executive branch, asking all agencies to immediately halt all non-emergency rulemaking so the Biden administration and its appointees may review and approve the rules before they are published or finalized. The head of each agency, including the DOL, is instructed to “consider postponing” the effective date of any finalized rule by 60 days to “review” any questions of fact, law and policy the rules may raise.”

This move will more likely than not mean the end of the DOL’s final rule on independent contractor classification set to take effect on March 8, 2021.  The rule would have reduced the number of primary factors the DOL would have considered when determining whether a worker is an independent contractor or an employee to two “core factors.”

Under the proposed rule, other lesser factors would only be considered when the two core factors do not lead to a classification determination. The Biden administration hopes to finalize a classification rule similar to the ABC test found in California law, which is a three-factor test where all factors must be met for an individual to be considered an independent contractor and not an employee. The Massachusetts independent contractor three-part test is substantially similar to the ABC test, and employers should not see a large difference if the ABC test is eventually adopted by the DOL.

The DOL’s finalized rule for joint-employer status set to take effect on March 16, 2021, likely will not take effect either due to the regulatory freeze. The Trump-era rule established a four-factor test for determining joint-employer status in the scenario where another person benefits from an employee’s work. If the Biden administration elects to revive an Obama-era rule regarding joint-employer status, it could likely make more businesses liable for the failure of franchisees or contractors to pay overtime or minimum wage to employees. For now, employers have to wait to see what the new executive appointees do in the upcoming months.

Renewing Flexibility in Regulatory Guidance by the Department of Labor

The Biden administration discarded an EO by former President Trump that directed agencies to curtail and streamline guidance practices, create a searchable database of guidance documents, and go through more stringent, formal procedures for “significant” guidance that did not quite reach the level of a formal regulatory rule. 

In accordance with that EO, the DOL implemented a final rule known as Promoting Regulatory Openness Through Good Guidance. In response to Biden’s revocation of Trump’s order, however, the DOL promptly withdrew the Good Guidance Rule, opining that it had deprived the Department and its subordinate agencies of “necessary flexibility in determining when and how best to issue public guidance” and of unduly restricting the agency. 

In the coming months, employers can expect the DOL to exercise its renewed flexibility to issue guidance implementing the Biden administration’s “Empower Workers” platform. That platform calls for, among other things, an increase in efforts to police the misclassification of workers as independent contractors and to encourage and incentivize union organizing and collective bargaining.

Upcoming Changing to Executive Agencies Pertaining to Labor and Employment

In his first weeks in office, President Biden made a number of top-level executive appointment nominations that will impact employers going forward. First, Biden nominated former Boston mayor Marty Walsh as the Secretary of Labor. Walsh is a former union president who supports union-friendly proposed legislation, including a bill known as the PRO Act, which seeks to bolster union membership and employee protections by blocking employers from replacing striking workers, among other measures. 

Biden has also nominated California’s Labor Secretary, Julie Su, as Deputy Secretary of Labor. Su has fought for low-wage and immigrant communities for decades, initially as a civil rights lawyer and for the past 10 years as a state official, earning high marks among labor leaders.  If they are confirmed by the Senate, these officials will likely direct the DOL to take a drastically different approach from their predecessors by shifting their focus toward protecting workers and boosting union rights.

As for the National Labor Relations Board (NLRB), Biden designated the sole Democratic member of the board, Lauren McFerran, as chairman and will likely fill the existing vacancy.  But Republicans will maintain a 3–2 majority on the NLRB until August 2021, when Trump-appointee Bill Emanual’s seat expires. Assuming Biden’s picks are confirmed to fill those vacancies, employers can expect a return to more employee-friendly, Obama-era labor policies, starting later this year, such as the NLRB’s decision in Purple Communications allowing employees to use work-provided email accounts to engage in activities protected under Section 7 of the NLRA.

The Biden Administration’s Wish List: From a Raised Federal Minimum Wage to Reinstating the FFCRA

In addition to the above, there are still other policies the Biden administration hopes to implement that would affect employers.

First, President Biden wants to raise the minimum wage to $15 per hour, but Massachusetts is already gradually hiking the minimum wage to the $15.00 per hour threshold. The minimum wage is currently $13.50 per hour (and $5.55 for tipped employees) and will reach $15.00 (and $6.75 for tipped employees) on January 1, 2023, in Massachusetts.  So, Massachusetts employers are unlikely to be impacted by this initiative.

However, President Biden wishes to raise the salary threshold for overtime exemptions as well. The administration’s hopes are to further increase the minimum salary required to qualify for an overtime exemption under the FLSA. Under the Trump administration, the threshold was increased to $35,568 per year (or $684 per week), and the new administration may seek an increase more aligned with the Obama-era stance of approximately $47,000 per year as the new threshold. 

As part of his proposed American Rescue Plan (ARP), President Biden also seeks to reinstate the Families First Coronavirus Response Act (FFCRA), which provided paid leave to eligible employees until December 31, 2020, for certain qualifying reasons. He also hopes to increase the amount of leave available to employees, as well as the number of employees eligible for the benefits.  

Specifically, the proposed legislation seeks to cover all employees for paid leave under the FFCRA, increase the amount of leave to 14 weeks and increase the maximum paid leave benefit to $1,400 per week. One bright point though: under the ARP, employers with fewer than 500 employees would be reimbursed for the cost of paid leave (as was the case under FFCRA).

Bottom Line

Under the Biden administration, many of the changes businesses are likely to see should not be completely foreign as they reflect a re-dedication to Obama-era principles as well as current Massachusetts policies and laws that have been in place for some time. 

Regardless, over the next four (or maybe eight) years, employers are certain to be impacted by significant changes to labor and employment laws. Our attorneys will keep you apprised of any significant updates right here.