Employers Should Expect Changes with the New Administration

Employers Should Expect Changes with the New Administration

A change in administrations is normally accompanied by changes to employment-related laws that reflect the viewpoint and policy of the President.

On January 20, President Joe Biden’s first day in office, the White House asked all federal agencies to freeze proposed regulations and those with pending effective dates so the president’s appointees would “have the opportunity to review any new or pending rule.” In response, during the past month, the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”), and United States Department of Labor (“DOL”) all announced that they are withdrawing or postponing the implementation of Rules, Proposed Rules and Opinion Letters that were issued during the previous administration.

Equal Employment Opportunity Commission

The EEOC left in place the final rule on its voluntary conciliation program, which took effect on February 16. The program offers employers and employees an alternative to litigation for resolving workplace discrimination complaints, and the final rule provides more information to employers during the conciliation process. The EEOC has indicated that all future conciliations will be conducted in accordance with the new Rule. However, the EEOC did freeze two proposed Rules.

On January 7, 2020, the EEOC published a final Rule ending the practice of paying federal workers who are union representatives for the work time they spend handling discrimination complaints. The Rule was frozen on January 20 so a determination could be made whether the Rule would deprive federal workers of valuable resources on how to navigate the EEOC complaint process.

The EEOC also froze a new Rule regarding employer-sponsored wellness programs. Under the proposed Rule, employers could comply with the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) only if they offer no more than a minimal incentive to encourage participation in wellness programs outside of the group health plan that collect employee health data, finding that allowing too high of an incentive would make employees feel coerced to disclose protected medical information to receive a reward or avoid a penalty. The EEOC is sure to issue new guidance in this area.

The National Labor Relations Board

On February 1, acting NLRB general counsel, Peter Sung Ohr, announced that he was rescinding 10 memos that he considered inconsistent with the National Labor Relations Act’s (NLRA’s) purpose.

The June 6, 2018, memo on employee handbooks from former NLRB General Counsel Peter Robb outlined three categories of rules: rules that are generally lawful, provisions warranting individualized scrutiny and rules that are lawful. Most of the rules mentioned in the memo were deemed to usually be lawful. Ohr said the June 6, 2018 memo was being rescinded because it was no longer necessary given the number of NLRB cases (in addition to 18 Advice Memoranda) interpreting the landmark NLRB decision in Boeing.

Ohr also rescinded a Robb memo that required NLRB staff to tell whistleblowers that they could face federal charges or be disciplined by their employer if they gave the NLRB video or audio that had been obtained illegally. However, Ohr stated that Regions should continue to not accept recordings that violate the Federal Wiretap Act and to apprise individuals who proffer recorded evidence when it may violate state law.

Other rescinded memos included a pair that lowered the bar for prosecuting unions, plus two others that increased the level of detail unions had to include in financial notices and called for imposing new rules on the collection of member dues and nonmember fees. Ohr also withdrew a memo seeking new limitations on union-employer neutrality agreements.

The NLRB policy changes implemented by Ohr in these areas will probably remain as the newly appointed General Counsel, Jennifer Abruzzo, is a former Special Counsel for Strategic Initiatives for the Communications Workers of America.

Department of Labor

The DOL froze rules and revoked recently issued opinion letters on paying tipped employees and classifying workers as independent contractors that were slated to take effect in March.

In the revoked letter, the DOL discussed rules for “nontraditional” tip pools, which include tipped servers and nontipped employees such as hosts and hostesses. The frozen final Rule set forth criteria for allowing tipped and nontipped employees to share in tip pools. Notably, eligible employers would have to pay all participants in the tip pool the full minimum wage instead of taking a tip credit. Additionally, the final Rule would have prohibited management from keeping any portion of employees’ tips regardless of whether the employer takes a tip credit.

Two additional opinion letters addressed whether certain workers can be classified as independent contractors under the FLSA or if they are actually employees. One opinion letter focused on whether a motor carrier can order tractor-trailer truck drivers to implement legally required safety measures without jeopardizing the drivers’ independent-contractor status. The other letter addressed whether distributors of a manufacturer’s food products are employees or independent contractors under the FLSA.

The DOL analyzed the facts of each letter under a final Rule that was scheduled to take effect on March 8. The rule would apply an economic-reality test to determine employment classification, primarily considering the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and investment. Three other factors would serve as guideposts in determining employment status:

·    The amount of skill required for the work.

·    The degree of permanence of the working relationship between the worker and the potential employer.

·    Whether the work is part of an integrated unit of production (or the individual works under circumstances analogous to a production line).

The rule is now on hold pending review from the current administration.

We will keep you updated on these issues and other changes implemented by the new administration. If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.


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