Biden Administration’s Proposed Additions to Federal Employment Laws

As the Biden administration takes office, significant additions to federal employment laws are on the horizon. Adjustments may include increased scope of federal discrimination laws, higher minimum wages, paid sick leave, modified requirements for federal contractors, enhanced enforcement investigation by OSHA and the EEOC, and cutbacks in non-compete restrictive covenants in addition to a new environment for union activity under the PRO Act.  Now that Democrats have a narrow majority of Senate votes, employers should be prepared for these potential changes.

Federal Anti-Discrimination Laws

President-elect Biden’s incoming administration seeks to expand federal discrimination law, including:

• The Paycheck Fairness Act. President-elect Biden has committed to signing the Paycheck Fairness Act, which has already passed the House. The Paycheck Fairness Act would make it substantially harder for employers to justify paying women less than men. Presently, an employer is permitted to pay a male employee a higher wage than a female employee so long as the reason is a “factor other than sex.” Under the Paycheck Fairness Act, however, an employer could only justify such disparities on education, training, or experience.  Employers would not be permitted to use salary history to set wages or make hiring decisions. This proposed legislation will likely make it easier for employees to sue employers for perceived or actual wage disparities.
• Pregnant Workers Fairness Act. President-elect Biden supports the Pregnant Workers Fairness Act, which would require employers to offer employees increased accommodations at the workplace when their abilities are limited by pregnancy, childbirth, or a related condition.
• Equality Act. President-elect Biden supports the Equality Act (already passed in the U.S. House of Representatives), which would prohibit employers from discriminating on the basis of sexual orientation and gender identity. This past summer, a majority of the U.S. Supreme Court held that Title VII prohibits discrimination based on sexual orientation and gender identity.  In addition to codifying this result, the Equality Act also contains new disclosure and reporting requirements requiring many businesses to publicize the diversity (or lack thereof) of their senior leadership and general workforce.
• Equal Employment Opportunity Commission (EEOC). The incoming Biden administration advocated doubling EEOC funding, so that the agency can hire more investigators and “fulfill its mission and address workplace discrimination.”
• Family and Medical Leave. The incoming Biden administration supports replacing current unpaid federal Family and Medical Leave with up to 12 weeks of paid family and medical leave.
• Age Discrimination. A Biden Administration would reverse the criterion set by the U.S. Supreme Court that a plaintiff bringing an age discrimination claim must show that but for his/her age, he/she would not have suffered the adverse employment action. President-elect Biden would allow age discrimination cases to use the same lower standard as claims alleging discrimination under Title VII, specifically that the protected characteristic was “a motivating factor” in the adverse action, rather than a “but for” reason. This change would make it easier for employees to prove age discrimination claims.
• Be Heard Act. President-elect Biden has expressed support for the Bringing an End to Harassment by Enhancing Accountability and Rejecting Discrimination in the Workplace Act (BE HEARD ACT). This act would extend prohibitions against employment discrimination under Title VII to all employees regardless of business size, as well as to those individuals who do not fall under the current definition of employee, including independent contractors, volunteers, interns, fellows, and trainees.
• OSHA Investigators. The incoming-Biden administration has signaled increased funding for hiring substantially more investigators for the Occupational Safety and Health Administration (OSHA).
• Mandatory Arbitration Claims. President-elect Biden has advocated legislation to ban employers from requiring their employees to agree to mandatory individual arbitration for claims that would otherwise be brought as class action lawsuits.

Independent Contractors

The in-coming Biden Administration plans to pursue enforcement of existing law regulating the independent contractor relationship.  In addition, President-elect Biden supports the nationwide adoption of the so-called “ABC” test recently enacted into law in California.  The ABC test makes it difficult for employers to utilize independent contractors.  Also, penalties for misclassification of workers would be increased to include compensatory damages and fines.

Enforcement Partnership

The incoming Biden administration plans to initiate a formal collaborative enforcement partnership comprised of the National Labor Relations Board (NLRB), the EEOC, the Internal Revenue Service, the Justice Department, and state tax agencies to prosecute worker misclassification by employers who use independent contractors by combined law enforcement efforts.  In support, the Administration would “fund a dramatic increase” in the number of investigators in all these federal agencies.

Federal Government Contracts

President-elect Biden said he will ensure that federal agencies only award federal contracts to employers who sign neutrality agreements promising not to oppose unionization of their workforces.  Biden will reinstate President Obama’s Executive Order 13495 that required businesses awarded a federal government contract to hire the employees of the previous company that held the contract.  In addition, President-elect Biden stated that employer’s compliance with labor and employment laws will determine whether businesses are eligible for federal contract awards.

Employee Wages

The incoming Biden administration’s pledge to increase the federal minimum wage from $7.25 to $15.00 an hour also carries a big impact for many businesses, including retail and restaurants. President-elect Biden also supports indexing the federal minimum wage to the cost of living and including tipped employees in minimum wage requirements.

Non-Compete Agreements

President-elect Biden stated that he would support federal legislation that would eliminate non-compete agreements.  He would only allow limited non-compete agreements that are “absolutely necessary” to protect a narrowly defined category of trade secrets.  The incoming Biden administration also has indicated support for an outright ban on no-poaching agreements whereby competitors agree not to hire away each other’s key employees.  These changes will require businesses across various sectors, particularly in high-tech industries, to revisit their policies and protections to safeguard staff and customers, financial investments, business goodwill and confidential information.

Whether this comprehensive agenda will be enacted into law in whole or in part may depend on prospects for filibusters against some or all of these proposals.  However, fewer legislative obstacles now exist for the full implementation of the President-elect’s labor and employment law agenda.