In this episode of The Proskauer Brief, partners Harris Mufson, Evandro Gigante, and Allan Bloom discuss key potential employment law changes under the Biden Administration. Tune in as we explore an evolving legal landscape – from new health and safety requirements to wage and hour regulations and expanded anti-discrimination laws.
Harris Mufson: Welcome to The Proskauer Brief: Hot Topics in Labor and Employment Law. I’m Harris Mufson, and on today’s episode, I’m joined by Evandro Gigante and Allan Bloom. We are going to discuss the key potential developments under the Biden Administration in terms of employment laws. So Evandro, let’s start with COVID-19. Can you describe at a high level what sort of key potential developments we can see in the employment front in the proposed stimulus package that the Biden Administration has floated?
Evandro Gigante: Sure. So as you can imagine, what we’re looking at from a COVID-19 perspective is a more uniform national response to the pandemic and what that means from the employers perspective is that the employer should be looking for more guidance more regulation from the federal level on how to work through issues such as paid leave, vaccinations, health and safety standards and the like. The Biden Administration put out a nearly two hundred page plan for the pandemic on the, really upon the inauguration and has most recently proposed a $1.9 trillion stimulus package, which includes funding for things like vaccinations, an extension, and expansion of what was previously the Families First Coronavirus Response Act. You may recall that that law provided a certain amount of paid leave to employees who had to take leave for COVID related reasons. Under the current Biden proposal embedded within his stimulus package would be an extension of that beyond the 2020 deadline that it expired on December 31st. It would apply the new law to employers of more than five hundred employees, not just those between fifty to five hundred, which is obviously a significant expansion. It would extend the weeks of paid sick leave from twelve up to fourteen but would still provide reimbursement for employers with fewer than five hundred employees.
So that’s one thing to look out for, of course, that hasn’t passed yet, and the Republicans have countered with a much smaller proposal on the stimulus package, and so we’ll have to see where that shakes out. On the issue of vaccinations, you’ll see funding towards vaccination programs that employers can participate in, and you’ll also see more strict standards when it comes to health and safety enforcement.
Harris Mufson: Yeah, on that front, the Biden Administration in an Executive Order, President Biden a few weeks ago, directed OSHA to promulgate stronger regulations with respect to a requirement for employers to ensure the health and safety of employees. The Trump administration had relied on the general duties clause under OSHA to hold employers accountable, but we will now see given this directive increased specific regulations in enhancing health and safety protocols that employers are required to adopt. We’ll continue to monitor that as well. Now to Allan, I want to ask you about potential developments that we may see on the wage and hour front. So could you talk about that from a high level?
Allan Bloom: Sure Harris, so after four years of pro-business policies under the Trump administration, I think employers can expect to see a much more pro-worker agenda from the US Department of Labor over the next four years. It starts at the top. President Biden has nominated Boston Mayor Marty Walsh for Secretary of Labor. Walsh is a long-time union leader, and he is expected to help implement Biden’s empower workers’ platform, which will carry with it a number of reforms. So you’ve already seen some activity at the US Department of Labor. On January 20th 2021, President Biden issued a regulatory freeze memorandum to the Department of Labor and all executive agencies, essentially shutting down any regulations that are in the pipeline.
Regulations that have already been sent for publication but have not yet taken effect. So that is essentially the end of the independent contractor final rule that came out on January 7th. That rule would have reduced the number of factors that the agency considers when determining whether somebody is an independent contractor or an employee. It would have made it easier for businesses to classify someone as an independent contractor if it’s going to take effect on March 8th, and now it is postponed pending further review, and we expect that the new Department of Labor will revise that substantially. Same thing with the tip regulations. That final rule came out December 30th and would have made a few changes to the tipped employee regulations that would make it easier for businesses to take a tip credit. That rule also now is suspended pending further review by the Department of Labor. In the last few days, the Department of Labor has withdrawn a few Trump Administration programs.
First, the PRO Good Guidance Rule required any guidance to go through a significant process before the public can rely on it. It would have made it more difficult for the Department of Labor to issue sub-regulatory guidance, that’s gone. The PAID program under which employers could go to the Department of Labor and have the Department of Labor supervise a settlement of a wage claim without having to pay liquidated damages, that’s gone as well. The DOL has already begun the process of withdrawing a number of Trump-era opinion letters, and it will continue to do that. And beyond that, I think, as you’ll see, there will be a push for a $15 minimum wage there’s already talk underway about that being included in the pandemic relief package. There could be overtime reforms as well, and there could be other changes to the Fair Labor Standards Act to include wage staff provisions that you’ve seen in a number of states over the last five years.
Harris Mufson: Evandro, on the anti-discrimination front, there have been discussions that there may be changes, substantive changes to the law protecting employees from discrimination either to broaden those laws or to overturn cases, decisions by the Supreme Court and could you just highlight a few of those issues that employers should be aware of that they should be able that they should anticipate in the coming months and years during the Biden Administration?
Evandro Gigante: From the employment discrimination perspective, I think employers can expect to see an expansion of protections accorded to employees. Many of this will be similar to what employers are probably already accustomed to when it comes to various state and local laws, including here in New York, where the protections are already quite broad. However, at the federal level, I think we should look for at least a push from the Biden administration to expand the enforcement of things like the Equal Pay Act with the possible amendment to the equal pay law. Basically, make it more difficult for employers to defend against those types of claims should they be raised by employees. From an age discrimination perspective, you may want to look for the proposed amendment to the current Age Discrimination and Employment Act that would be essentially an extension or expansion of an employee’s ability to prove age discrimination. Currently, under a Supreme Court case that came out in 2009, an employee has a pretty high burden to show that, but for the fact that he or she was over the age of 40, they would not have been terminated, for example, in a discharge case. That’s a pretty high standard relative to other employment discrimination laws. Amendments have been proposed over the years to expand that to something more consistent, but what you see in Title VII and other anti-discrimination laws and I think you can see a push there as well to expand that into something less than and what’s called “but-for.” I think you’ll also see certainly a more pro-employee agenda from agencies like the EEOC and the OFCCP. The new president has already proposed names for individuals to take positions in those agencies that are historically sort of pro-employee individuals and. So I think once that takes effect, we’ll start to see more regulation, more enforcement you know from those agencies than even we have before, and beyond that, I think, generally speaking, the new president has been in favor of things like expanding paid family leave to individuals at the federal level. Currently, there’s an entitlement to unpaid leave under the FMLA, but Biden has long supported the extension and expansion of that to a paid leave program, and so you might see some legislation proposed there as well.
Harris Mufson: Thanks, Evandro. So Allan, let’s wrap up and just talk a little bit about arbitration and class-action waivers. We’ve certainly seen over the past few years some hostility to it from bluer states to mandatory arbitration, and there has been discussion about some developments on that front on the federal level under the Biden administration. Could you highlight that issue?
Allan Bloom: So Harris, could we finally see the end of mandatory arbitration in class-action waivers? So arbitration has been around since 1925 on the federal level, the Federal Arbitration Act, and a number of employers since the Supreme Court’s decision in Gilmer in 1991 basically saying you can require employees to agree to arbitrate discrimination claims in advance. A number of employers have implemented arbitration programs. In connection with that, a number of employers have also put class-action waivers into place, basically requiring employees to arbitrate their disputes individually and not as part of class action, and the Supreme Court in ethics systems in 2018 said that’s legal as well. So there has been a lot of talk about making both of those things unlawful as with any sitting president, President Biden has only a few tools at his option. Legislation, rulemaking or executive orders, and the like, and because the Supreme Court has said that arbitration is legal that class-action waivers are legal, President Biden will need Congress to pass a law that says they aren’t. Sure the Senate is now controlled by Democrats, with Vice President Harris casting the tie-breaking vote so Congress certainly could legislate mandatory pre-dispute arbitration out of existence. In the employment context and the consumer context and also make class-action waivers unlawful, but there is always the possibility of a filibuster, which still exists. Under the Senate rules, forty-one senators can block a vote on almost any legislation around these lines. So if they wanted to, the Senate Republicans could filibuster laws that would impact arbitration and class-action waivers. We’ll have to wait and see how that plays out in the Senate.
Harris Mufson: All really interesting topics and something we’re obviously going to keep our eye on as we certainly anticipate significant potential developments in the employment space certainly over the next hundred days and beyond during the Biden administration. So thank you very much, Allan and Evandro, for your insights there, and thank you for joining us on The Proskauer Brief today. Stay tuned for more insights on the latest hot topics in labor and employment law, and be sure to follow us on Apple Podcasts, Spotify, and Google Podcasts.