A Review of Impactful Employment Law Changes the Biden Administration has made after One Quarter in Office
The Biden administration has wasted no time making significant changes to the employment law landscape that will impact employers. Perhaps most significant is the American Rescue Plan Act (“ARPA”), which was signed into law on March 11, 2021, and provided approximately $1.9 trillion in spending to address the continued impact of the COVID-19 pandemic. Among other things, ARPA extends tax credits available to employers with fewer than 500 employees who voluntarily choose to grant employees paid leave under the Families First Coronavirus Response Act (“FFCRA”) through September 30, 2021. Another significant mandate of ARPA impacting employers and their group health plans is the requirement to offer 100% subsidized COBRA continuation coverage to eligible plan participants (defined as “assistance eligible individuals” or “AEIs”) between April 1, 2021, through September 30, 2021. There are many nuances (and other technical requirements) associated with this mandate that necessitate quick action from employers (and their group health plans) to comply. ARPA requires group health plans to provide notices to AEIs who are losing their health care coverage and are eligible for COBRA premium assistance by May 31, 2021.
In addition to ARPA, other significant employment changes that the Biden administration has made during President Biden’s first quarter in office include:
- Executive Order 13988. On January 20, 2021, President Biden issued Executive Order 13988, entitled Preventing and Combating Discrimination on the Basis of Gender Identity and Sexual Orientation. Executive Order 13988 sets forth the administration’s policy to (1) prevent and battle discrimination based on gender identity or sexual orientation; (2) fully enforce Title VII and other laws that prohibit discrimination based on gender identity or sexual orientation; and (3) address discrimination that overlaps with other forms of discrimination, such as race or disability. While the action required by Executive Order 13988 only applies to federal agencies, its enactment demonstrates to employers everywhere that the Biden administration is committed to supporting LGBTQ rights.
- National Labor Relations. Earlier this year, President Biden removed the Board’s General Counsel and named Peter Sung Ohr as Acting General Counsel. While the General Counsel is not able to change the Board’s precedent, the individual in the position sets the Board’s agenda on policy. Since Ohr has taken over, he has rescinded a number of memos which instructed investigators and lawyers on enforcement priorities, thereby reshaping the Board’s position on critical labor law initiatives. The memos rescinded by Ohr addressed topics such as: (1) employer policies that could affect employee rights under the National Labor Relations Act; (2) neutrality agreements in which employers allow organizing activities or negotiate terms before a union is recognized as the representative of employees; and (3) encouraging the Board to place more stringent burdens on unions, including memos and guidance regarding the duty of fair representation which would have made it easier for employees to allege such claims. These changes make clear that the Board will be much more union/employee friendly for the next four years.
In addition to the aforementioned changes, the Biden administration is expected to attempt to implement the following policy changes in the near future:
- Paycheck Fairness Act. The Biden administration supports passage of the Paycheck Fairness Act (“PFA”), re-introduced in the House and the Senate in January 2021 with bi-partisan support. The PFA narrows the justification for pay disparities. Presently, employers may defend a pay disparity as lawful under federal law by asserting one of four defenses, including the defense that the disparity is based on “any other basis other than sex.” The PFA eliminates that broad defense and instead requires employers to establish that pay differentials are based on a bona fide factor other than sex, such as education, training, and experience. In addition, the PFA prohibits employers from (1) restricting discussions and retaliating against employees who share pay information, and (2) seeking salary history information from prospective employees as a means of establishing a starting salary or as a condition of employment.
- Paid Family Leave. The Biden administration has indicated that family leave is a top priority, particularly given the COVID-19 pandemic and its strain on families. As such, President Biden has openly supported the Family and Medical Insurance Leave Act, known as the FAMILY Act. The FAMILY Act, if passed, would provide employees with up to 12 weeks of partial income for taking time off for their own serious health condition or that of an immediate family member and for the birth or placement of a child. The FAMILY Act would apply to employers of all sizes and would also apply to part-time employees. The FAMILY Act would require employees and employers to contribute to a fund. This fund would then provide a certain percentage of the employee’s compensation if the employee were unable to work due to one of the qualified reasons.
- Independent Contractors, Revised Wage and Hour Guidance, and Increased Enforcement. President Biden has pledged that his administration will aggressively pursue employers who violate labor laws, participate in wage theft, or intentionally misclassify employees as independent contractors. Consistent with this pledge, the DOL has withdrawn two recent opinion letters that addressed when an individual may be considered an independent contractor as opposed to an employee. Under President Biden’s administration, the DOL will likely withdraw the current method used to evaluate who qualifies as an “independent contractor” under the Fair Labor Standards Act.
- Non-Compete Agreements. President Biden has also stated that his administration would take an aggressive approach on non-compete agreements. Specifically, President Biden has stated that he would support federal legislation that would eliminate non-compete agreements and would only allow non-compete agreements “that are absolutely necessary to protect a narrowly defined category of trade secrets.”
Other topics that the Biden administration is likely to make a priority over the next few years include broader anti-discrimination laws (especially greater LGBTQ discrimination protections and enforcement), increased federal minimum wage, overtime rule changes, and pro-employee/union legislation. We will keep you updated with any significant changes as they occur.
If you have any questions or would like to learn more about the above, please do not hesitate to contact FGKS Law at 937-492-1271 or info@fgks-law.com.
