Whenever there’s a change in administration, employers have come to expect implications for their companies. A rule change here, a tweak of language there, a new regulation for this, some new guidelines for that. But this is not just any change in leadership.
The Trump administration ushered in sweeping tax reform and rolled back numerous labor programs, not to mention stood up the brand-new Payment Protection Program for companies affected by the COVID-19 pandemic. And more changes, including rollbacks of recent rollbacks, are expected under the incoming administration. As Inauguration Day approaches, companies that take a wait-and-see approach might find themselves scrambling to keep up.
At XMI, we’re not in the business of fortune-telling, but it doesn’t take a crystal ball to figure out what’s coming. President-elect Joe Biden has historically been and promised to be employee friendly. And we expect that will mean policies and regulations that lean toward employee protections versus employer freedom. These are just a few of the areas we’re watching.
While there has been no temporary emergency OSHA standard for COVID-19 enacted to date, policy experts say this could happen early in a Biden administration. In addition, we expect to see more citations issued to employers found violating Centers for Disease Control and Prevention guidelines. Prepare now by ensuring your safety policies and procedures are up-to-date and compliant with current CDC guidelines. But, also be on the lookout for federal funding opportunities that could help you meet temporary standards, such as improved ventilation.
We also expect to see an increase in OSHA enforcement in areas not related to the pandemic. But since the number of OSHA inspectors dwindled during the Trump administration, this would also require a hiring spree, so it might take some time to see this focus on worker safety translate into additional inspections.
Payroll and Wages
Biden has advocated for a $15 federal minimum wage and a removal of the tip credit that allows employers to pay a lower minimum wage to workers who receive tips. The income threshold for the FLSA exemption could increase, and businesses should also expect to see more enforcement (read: fines) of wage laws. Just as the Trump administration made changes to employment taxes and Social Security withholdings, employers can expect another round of changes that will impact payroll operations.
As we speak, the Department of Labor has a proposed rule that would change how an independent contractor would be classified, essentially making it easier to classify a worker as an IC. If the rule is finalized before Trump leaves office, its lifespan would certainly be short, as Biden has shown support for expanding the definition of who qualifies as an employee. This could make it harder for you to hire independent contractors and expose you to worker misclassification claims.
Employers can expect that the Biden administration will make it easier for workers to organize in the coming months and years, including allowing micro-units to organize at workplaces, shortening the timelines of union election campaigns, and penalizing employers that interfere with or retaliate against organization efforts.
While the Families First Coronavirus Response Act provides for paid sick leave and expanded family and medical leave for employees affected by the pandemic, the benefits are set to expire at the end of the year. Whether it happens before or after the new year, companies should expect these benefits to be renewed soon. Outside of the pandemic, Biden has signaled support for expanded paid leave for all workers to care for newborn, newly adopted or newly fostered children, for serious health conditions, whether the worker’s or a family member’s, and to care for injured family members in the Armed Services.
Equal Employment Opportunity Commission
Pay equity is expected to be an issue that the Biden administration prioritizes in a way that hasn’t been under the current administration. In addition to funding the EEOC to investigate worker claims, there will likely be a return to requiring employers (with more than 100 employees) to collect and report compensation information by gender, race and ethnicity.
In terms of employment-related immigration, Biden is expected to undo all the changes President Trump has made over the last four years. Among the expected changes are removing the rules that led to an increase in denials for the H-1B visa program for foreign professionals, ending workplace immigration raids and rescinding restrictions on travelers from 13 countries (these are different from the pandemic-related travel bans).
Biden is expected to rescind the recent executive order, titled Combating Race and Sex Stereotyping, a Trump order that would penalize the use of terms like “white privilege,” “unconscious bias” and “system racism” in diversity trainings.
Adding more uncertainty to the mix is the unknown outcome of the pair of Georgia runoff races that will determine whether Republicans or Democrats control the U.S. Senate. If Republicans keep the majority, experts say the president-elect will need to use executive orders to usher through some of these changes, which can happen quickly and without much notice. If Democrats control the Senate, the impact could be greater, but the changes will take place at a more manageable pace.
The bottom line: Anticipating what will happen under a new administration isn’t just for fun, or speculation or debate; it’s because you have to be ready.