Friday, January 22, 2021

New Year, New Administration Bringing Changes to Legal Landscape for Employers

Author: Mark Mathison


It comes as little surprise that the new administration in Washington is contemplating changes to laws and rules affecting employers. Early hints about changes that might be in store began to appear already on Inauguration Day. These included a regulatory freeze issued by the White House in the form of a non-binding memorandum to federal agencies. This freeze, which is aimed at halting pending regulatory changes while the new administration takes time to assess them, may affect the Final Rule on Independent Contractor status about which we wrote in this space on January 14, 2021. We noted in that post:
It is anticipated that the Biden administration will takes steps to withdraw or change the Final Rule. The new administration may be able to delay the effective date of the rule by up to 60 days. During any postponement, the Biden administration could seek to propose a new rule or repeal the Trump administration Final Rule through the administrative rule-making process.

Another immediate indicator of change involves high-level staffing at the National Labor Relations Board (NLRB). The NLRB enforces the federal labor law governing rights and duties of employers, non-management employees and unions related to collective bargaining and other concerted activity. President Biden has terminated the General Counsel of the NLRB, Peter Robb, who was a Trump appointee. Alice B. Stock, who was Deputy General Counsel to Mr. Robb, is now Acting General Counsel. Lauren McFarren, the sole Democrat-appointed member of the current Board, has been made its Chair, replacing Member John Ring. It is expected that some Trump-era labor law interpretations will be modified or reversed once there is a Democratic-appointed majority, but currently the Board has three Republican appointees and only one Democratic appointment. President Biden does have an immediate opportunity to fill one vacant Board seat, but the five-member NLRB is expected to maintain a Republican-appointed majority until at least late August when the term of William J. Emanuel expires. Some Trump-era labor law interpretations will likely be modified or reversed once there is a Democratic-appointed majority. Although the General Counsel has authority to select cases and issues for enforcement, she cannot directly change existing legal interpretations issued by the NLRB in case decisions or regulations. Any such changes of significance are therefore likely to be on hold until late this year, though we will likely receive indications about the contours of such changes earlier on. Legislative activity seeking modifications of the current labor law is also expected, and could appear earlier than NLRB-based changes.

Employers who are federal contractors are affected by another of the new administration’s first-day executive orders. One of these orders revokes a recent Trump executive order on workplace training that prohibited federal contractors from promoting “divisiveness” by using any training that “inculcates in its employees any form of race or sex stereotyping or [ ] scapegoating.” That order, which we wrote about last fall, specified a number of specific concepts considered to be divisive, and thus prohibited; and was widely viewed as requiring substantial changes to existing workplace training programs in use by federal contractors as integral to their compliance with federal contracting regulations. The new executive order is described as part of “a comprehensive approach to advancing equity for all.”

In local government developments, on January 1 a new Minneapolis ordinance governing “freelance workers” took effect. This ordinance requires written contracts for independent contractors, setting forth the basis and dates for compensation and other elements of the working arrangement, including the scope of services to be performed, if the contractor will perform at least $600 worth of work within Minneapolis over the course of one year, or at least $200 within a single week. Penalties may be imposed for noncompliance.

These changes and earlier indicators of other changes on the horizon probably represent just the tip of the iceberg. Your labor and employment attorneys at Lathrop GPM will, as always, be following all developments in the workplace law as they unfold in this new environment.

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