Get Your House in Order, the Feds are Coming (Back)KAM
Assuming Joe Biden is sworn into office in January 2021, he can begin taking actions that will immediately impact your policies, rules and procedures. You should begin “getting your house in order” now by preparing for a return to more aggressive regulation and employee-friendly legislation under the Biden administration.
The prospective Biden administration has already made clear that worker’s rights is a high priority, including workplace safety. The executive branch determines how and how aggressively federal government agencies, like the Occupational Safety & Health Administration (“OSHA”), the Equal Employment Opportunity Commission (EEOC), the Department of Labor’s Wage and Hour Division, and the Office of Federal Contract Compliance Programs (“OFCCP”) will enforce their regulations. While it is difficult to forecast exactly what changes a Biden administration may make, here are several changes manufacturing employers might expect and how to prepare for them.
- Changes to OSHA
As discussed in a prior November 9, 2020 alert released by Fisher Phillips’ Workplace Safety and Catastrophe Practice Group co-chairs, given the COVID-19 pandemic, employers should expect the Biden administration to create an Emergency Temporary Standard For COVID-19. Specifically, Biden has urged President Trump to “immediately release and enforce an Emergency Temporary Standard to give employers and frontline employees specific, enforceable guidance on what to do to reduce the spread of COVID.” Although the Trump administration has stated that it will not be enacting a COVID-19 standard, Biden will likely work with unions and other worker advocacy groups to develop a COVID-19 standard if the pandemic continues to impact worker safety in early 2021. If that happens you can bet it will not be an easy standard for employers to live with. Biden has also called for President Trump to increase the number of OSHA investigators “to enforce the law and existing standards and guidelines.” Consequently, employers should begin taking action now (if you haven’t already) to ensure your workplace safety policies and procedures comply with CDC and OSHA guidance on COVID-19 (not just on paper, but in practice).
- Wage and Hour
Employers are likely to see an uptick in wage and hour litigation under the Biden administration, especially concerning worker classifications. As background, in March 2020, the Department of Labor adopted a final rule narrowing the definition of “joint employer” to limit the circumstances under which multiple companies could be deemed to “employ” the same workers. In September 2020, the Department of Labor proposed another rule broadening the “independent contractor” test to make it easier for companies to classify workers as independent contractors under the Fair Labor Standards Act (“FLSA”). Biden then pledged that he would work to enact legislation making worker misclassification a substantive violation of the law and said he would drive efforts to reduce workers’ misclassification. As such, a Biden administration will likely reverse the “joint employer” rule and strive to make it easier to establish joint-employment. Biden may also withdraw the independent contractor rule, which has not yet been finalized. If the rule is finalized before Biden takes office, he may take steps to rescind the rule. Biden’s DOL also may issue new regulations broadening the definition of “employee” to expand the protective scope of the FLSA. Although we’ll have to wait and see, employers should brace themselves for enhanced penalties and enforcement actions targeting employers who do not comply with the wage and hour laws.
- Employee Benefits
A Biden administration will likely evaluate and revisit the cost of healthcare and may work to expand the Affordable Care Act (ACA) premium and cost-sharing subsidies. There is also a proposal to reduce the eligibility age for Medicare to 60 from 65 so that workers who continue to work until 65 can keep their coverage under employer-sponsored insurance and can opt to retire early if they choose to. If the administration adopts these provisions, employers will need to revisit their insurance plans to consider the terms and provisions required to comply.
- Pay equity
Another issue highlighted during Biden’s campaign is the pay inequity that he claims exists due to inconsistent application of the minimum wage laws. Biden supports passage of the Paycheck Fairness Act and has vowed to sign it into law if he becomes President and it comes to his desk. The bill’s purpose is to eliminate wage discrimination based on sex and reduce the gender pay gap. If passed, it would amend the FLSA 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. Although the U.S. House passed the Paycheck Fairness Act in 2019, the Senate took no action on the bill. Even if the federal bill does not pass, employers should expect to see an increasing number of states pass their own pay equity statutes.
- LGBTQ Rights
Biden has been a strong supporter of LGBTQ and transgender rights. During his campaign, Biden vowed his administration would enact the Equality Act to “end legal discrimination against LGBTQ+ people, expand economic opportunities for LGBTQ+ people, reform our treatment of transgender and gender non-conforming individuals in our criminal justice system, ensure access to accurate identification documents, and improve government data collection to better track violence against the transgender community.” Keep in mind the Supreme Court recently held, in the Bostock decision, Title VII’s prohibition of “sex” discrimination necessarily includes sexual orientation and gender identity. A Biden administration likely would propose legislation officially adopting the Court’s decision.
- Employee Leaves
Finally, Biden has a history of supporting family and medical leaves for employees. The paid leave program Biden supported during his campaign called for legislation providing 12-weeks of paid leave for all workers for their own or a family member’s serious health condition. Biden, however, did not provide specifics regarding this program or how these benefits would be funded. Additionally, it is not clear whether Biden would endorse the proposed Family and Medical Insurance Leave Act (the FAMILY Act) which would require employers to provide paid sick leave to their workforces. It is also unclear whether Biden would seek to extend the Families First Coronavirus Response Act (FFCRA), which currently requires covered manufacturing employers to provide up to 80 hours of paid-sick-leave benefits and/or FMLA job-protected, paid leave for eligible employees due to the COVID-19 pandemic but is set to expire December 31, 2020.
Manufacturing employers should start preparing for a future legal and regulatory environment that is more focused on the expectations of their employees’ safety concerns, leave, and equal pay, to name a few. You should be prepared for exhaustive scrutiny of your employee handbook rules, policies, and procedures. You can begin taking actions now by conducting wage and hour audits to ensure compliance with the FLSA. You should also review safety policies and procedures for compliance with CDC and OSHA guidance as they relate to COVID-19. Given the prospective Biden administration’s ideology, employers would be wise to seize this limited window of opportunity and begin training supervisors and managers to be ready for more employee-friendly legislation as well as ramped up administrative enforcement. Don’t wait…now is the time to get your house in order.
This article provides an overview of certain legal issues. It is not intended, and cannot be construed, as legal advice for any purpose. For more information, contact an attorney in Fisher & Phillips’ Louisville, Kentucky office (502-561-3990).