April 29, 2021 marks the 100th day of Joe Biden’s presidency. Like any new administration, the Biden administration has begun to demonstrate its positions, policies, and priorities that will guide its actions and decisions over the next four years. The Biden administration’s efforts over the first 100 days have focused on issues related to the COVID-19 pandemic. It is important for employers to be cognizant of some of these COVID-related efforts, along with other non-COVID related labor and employment actions already taken by the Biden administration.
COVID-19-Related Employment Actions (The American Rescue Plan Act)
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA-21), providing continued economic relief to individuals, businesses, and governments during the COVID-19 pandemic.
Many provisions of ARPA-21 are relevant to employers. Key employment-related provisions of ARPA-21 include:
- Paid Sick and Family Leave Tax Credits: ARPA-21 does not require private employers to provide paid sick or family leave for COVID-19 related reasons (as was required under the Families First Coronavirus Response Act). However, ARPA-21 does extend the availability of tax credits through September 30, 2021 to private employers with fewer than 500 employers who voluntarily provide paid sick leave. ARPA-21 also expands the COVID-19-related qualifying reasons for the tax credits to include (a) employees seeking or awaiting results of a diagnostic test for, or medical diagnosis of, COVID-19 after an exposure to COVID-19 or a test or diagnosis at the employer’s request; (b) employees obtaining immunization related to COVID-19; and (c) employees recovering from any injury, disability, illness, or condition related to COVID-19 immunization.
- COBRA Premium Subsidy: ARPA-21 provides a COBRA premium subsidy to certain eligible employees or dependents of employees who lose group health plan coverage due to an involuntary separation or reduction in hours. For self-insured plans, employers cover the premium and may receive a payroll tax credit in the amount of the subsidy as reimbursement. For fully-insured plans, the insurer may receive the payroll tax credit. To receive a payroll tax credit, the employer is required to provide notice to COBRA-eligible individuals of the premium subsidy and its expiration date and the ability to make new COBRA elections.
- Other ARPA-21 Provisions: ARPA-21 also includes provisions related to unemployment benefits and compensation, the Payroll Protection Program (PPP), the extension of the employee retention credit, economic relief for restaurant employers, and funding for aviation manufacturing-related employers. You can read more information on these ARPA-21 provisions here.
Protecting the Right to Organize Act
On March 9, 2021, the House passed the Protecting the Right to Organize Act of 2021 (PRO Act), a bill that contains the most significant expansion of labor rights since the 1930s-era New Deal. At this time, the PRO Act has not passed Senate. The status of this bill will be important for employers to monitor.
The PRO Act would make over 50 changes to the National Labor Relations Act (NLRA), some of which would impact employers regardless of whether their workers are unionized.
Among other things, (a) it would revise the definitions of “employee,” “supervisor,” and “employer” to broaden the scope of individuals covered by the fair labor standards; (b) permit labor organizations to encourage participation of union members in strikes initiated by employees represented by a different labor organization (i.e., secondary strikes); and (c) prohibit employers from bringing claims against unions that conduct such secondary strikes.
Additionally, the PRO Act would prohibit the creation and enforcement of mandatory arbitration agreements in which employees waive their right to collective or class action.
You can read more information on the key provisions of the PRO Act here.
Gender Identity and Sexual Orientation Equality
On his first day in office, President Biden issued several Executive Orders, including Executive Order 13988, on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.
Executive Order 13988 describes the administration’s policy to enforce Title VII and other laws that prohibit discrimination based on gender identity or sexual orientation and to address discrimination that overlaps with other forms of discrimination such as race or disability.
It requires federal agency heads to consider revising, suspending, rescinding, or creating new agency actions to fully implement statutes that prohibit sex discrimination, which includes discrimination based on gender identity or sexual orientation.
Employers should be aware of this focus of the Biden administration and consider revising policies and implementing or providing educational and training programs and opportunities for employees.
Independent Contractor Rule
On January 6, 2021, the Department of Labor (DOL) issued a final rule, previously discussed here, expressly adopting the “economic realities” test for evaluating independent contractor status under the Fair Labor Standards Act (FLSA). It was scheduled to take effect March 8, 2021.
However, on Biden’s first day in office the Biden administration DOL issued an order freezing this independent contractor rule. The Biden administration has since published a proposal delaying the effective date of the rule until May 7, 2021 and another proposal to withdraw the independent contractor final rule.
Martin Pringle will continue to monitor the situation and update on any new developments.
Tipped Workers Rule
On December 22, 2020, the DOL issued a final rule related to compensation of tipped employees, previously discussed here. It was scheduled to take effect March 1, 2021.
Like the independent contractor rule, the Biden administration DOL issued a freeze on the rule and later published a proposal delaying the effective date of the rule until April 30, 2021.
Part of the rule will take effect on April 30, 2021, including the following aspects:
- Employers, including supervisors and managers, are prohibited from keeping any portion of tips received by employees;
- Non-traditional tip-pooling between tipped and non-tipped employees (such as cooks) will be allowed if the employer does not take a tip credit; and
- New recordkeeping obligations will be required of employers if non-tipped workers share in a tip pool, including a notation in the pay records identifying each employee who receives tips and weekly or monthly reporting by the employee to the employer of tips received.
The following provisions of the rule are delayed, and will not take effect on April 30, 2021:
- Provisions related to the assessment of civil money penalties against employers who violate the FLSA tipping rules; and
- The portion of the rule relating to the application of the tip credit to employees performing both tipped and non-tipped duties.
Martin Pringle will continue to monitor and update if and when other aspects of the tip rule take effect.
Federal Minimum Wage
The Biden administration’s $15/hour federal minimum wage proposal was not included in ARPA-21. However, efforts to implement an increased federal minimum wage will likely continue. On April 27, 2021, the President signed an Executive Order requiring federal contractors to pay their employees a minimum wage of $15 per hour by March 30, 2022. While a minimum wage increase still faces many hurdles, employers with wages below $15/hour should monitor the issue and be prepared for a federal minimum wage increase. Employers will also have to address wage compression issues that may be created by a higher minimum wage.
As the Biden administration passes the 100-day mark, the employment attorneys at Martin Pringle will continue to monitor and provide updates on these and other labor and employment related developments.