Throughout his campaign, President Biden proclaimed his support for various legislative and regulatory proposals that would have a significant impact on labor and employment law: from pay equality and increases in the minimum wage to misclassification and additional anti-discrimination protections. We believe that employers should expect new and amended workplace laws and regulations in 2021. Below is a summary of a handful of initiatives that the Biden administration is likely to prioritize.
President Biden has pledged to tackle the issue of pay disparity, specifically, he has pledged to sign the Paycheck Fairness Act into law during the term of his presidency. Under the current employment law, an employer has the right to pay a male employee a higher wage than a female employee but they have the burden of proving that the disparity is due to any factor other than the employee’s sex. The Paycheck Fairness Act seeks to limit such disparities to strictly objective and bona fide factors such as education, training, or experience and would also force the employer to demonstrate that the bona fide factor is job-related with respect to the position in question, consistent with business necessity, and accounts for the entire differential in compensation at issue. If signed the act would make it easier for employees to pursue wage discrimination actions against employers.
The current federal minimum wage is $7.25 per hour. President Biden has been in favor of raising it to $15.00 per hour. Additionally, the Biden Administration has also spoken out about seeking to increase the minimum salary to qualify as an exempt employee under the FLSA which is currently $684.00 per week.
Although discrimination on the basis of sexual orientation and gender identity was outlawed by the Supreme Court’s decision in Bostock v. Clayton County, Georgia, last year in June of 2020, President Biden has made repeated statements about his wishes to sign the Equality Act into law in 2021. In essence, The Equality Act would prohibit discrimination on the basis of sexual orientation and gender identity in the areas of employment, housing, and education.
Paid Family Leave:
The current Family Medical Leave Act (FMLA), offers employees up to 12 weeks of unpaid family and medical leave. President Biden has expressed support for providing paid federally paid family and medical leave. This would most likely be achieved through legislation amending the FMLA.
Challenges to non-competition and arbitration agreements or clauses in employment agreements might be seen during the Biden administration. President Biden has called for the prohibition of non-competition clauses except in cases where they are absolutely necessary in order to protect a company’s trade secrets for example. He has also shown support for the Forced Arbitration Injustice Repeal Act, which if passed, would prohibit employers from forcing employees to sign pre-dispute arbitration agreements as a condition of their employment.
Under the current law, joint employers (as classified by the Fair Labor Standards Act (FLSA)) may be joint and severally liable for another employer’s employees’ wages and overtime. On January 12, 2020, the U.S. Department of Labor enacted rules which provided more clarity as to who is to be considered a joint employer under the FLSA. The updated rule which because effective as of March 16, 2020, sets out a four-factor balancing test to determine whether a person or entity is to be classified as a joint employer for purposes of wage and overtime claims. The four factors take into account whether a person or entity has actually exercised any of the following actions: 1) Hires and fires employees; 2) Supervises and controls employees’ work schedules or conditions of employment to a substantial degree; 3) Determines employees’ rate and method of payment; and 4) Maintains employment records. It is important to note that on September 8, 2020, the U.S. District Court for the Southern District of New York, struck down significant portions of this new rule. The court found the rule’s “vertical” joint employer standard (Vertical joint employment arises when an entity uses any sort of intermediary employer, such as a staffing agency or subcontractor to provide labor) was “arbitrary and capricious”. To date, that portion of the U.S. DOL rule is still enjoined. It seems that under the Biden Administration, the National Labor Relations Board (NLRB) is expected to reverse the current restrictive joint employer standard and apply the test articulated in the 2015 decision of Browning-Ferris Industries of California, Inc., 362 NLRB 1599 (2015), holding that a business shall be classified as a joint employer if it demonstrates indirect control or the ability to exert control over employees.
During his campaign trail, President Biden pledged to aggressively pursue employers who intentionally misclassify employees as independent contractors by enacting legislation that makes this type of misclassification a violation of federal employment, labor and tax laws and imposing heavier penalties for such violations. Biden has expressed his intent to narrow the scope of workers that can be properly classified as independent contractors by increasing funding for U.S. DOL investigations of employers as to the matter. Nevertheless, on January 6, 2021, the U.S. DOL issued a rule that is supposed to take effect on March 8, 2021, which will broaden the definition of an independent contractor. Biden could try to rescind the rule before its effective date.
Only time will tell what actual changes in the law the Biden Administration will be able to implement, but it is definitely important for employers to be aware of and keep an eye on this area of the law.
Our firm offers in-person and virtual consults if you have any questions or concerns about changes to employment laws and how it may affect your company, as well as any corporate, commercial, employment, construction, or family law issues, please feel free to call our office at 305-460-0145 or to schedule a consultation.