By Michael S. Kun on January 4, 2021
At the time we are posting this, we are just weeks away from the inauguration of President-Elect Joseph Biden. Although perhaps not at the very top of the list of questions about the forthcoming Biden administration, somewhere on the list has to be this question: “What changes will we see in wage-hour law?”
We don’t have the proverbial crystal ball, but there are a number of issues that the Biden administration may focus on at some point during the next four years, be it through legislation, new rules implemented by the Department of Labor (DOL) or even executive orders. They may include the following:
1) An increase in the federal minimum wage
The last time the federal minimum wage was increased was more than 11 years ago – in July 2009 – when it was increased from $6.55 per hour to $7.25. This appears to be the longest Congress has ever gone without increasing the minimum wage. With more and more states and local governments increasing their minimum wages to $15.00 per hour or more, a push to increase the minimum wage seems likely from the new administration at some point in the next four years.
2) Adoption of a new test for independent contractor status – perhaps one based on California’s controversial AB 5
In “The Biden Plan for Strengthening Worker Organizing, Collective Bargaining, and Unions,” President-Elect Biden pledged to “enact legislation that makes worker misclassification a substantive violation of law under all federal labor, employment, and tax laws with additional penalties beyond those imposed for other violations.” And he pledged to “fund a dramatic increase in the number of investigators in labor and employment enforcement agencies to facilitate a large anti-misclassification effort.”
What might President-Elect Biden have in mind? And what might he be looking at as a model?
We have written here frequently about California’s controversial independent contractor statute known as AB 5, which established an onerous “ABC” test that must be satisfied for workers in most industries to be classified as independent contractors.
During his campaign, President-Elect Biden expressed his admiration for AB 5 and suggested that he would like to see it implemented nationwide. It would not be surprising to see that desire resurface at some point during his presidency.
3) Raising the salary threshold for white collar exemptions
Near the end of President Obama’s administration, the DOL issued a rule increasing the salary threshold for most white collar exemptions from $23,660 ($455 per week) to $47,476 ($913 per week). Only an eleventh-hour injunction and new, post-election DOL leadership stopped that rule from being implemented. Instead, under the new DOL leadership, the salary threshold for most white collar exemptions was raised to $35,568.
Might the Biden administration look to push the salary threshold up to that same $47,476 figure that had come so close to being implemented – or something close to it? Of course.
4) Not defending the DOL’s “joint employer” rule in court
The standard for “joint employers” has been debated and redefined repeatedly over the years. During the current administration, the DOL issued a business-friendly rule defining the term. The validity of that rule is currently a matter of appeal before the Second Circuit Court of Appeal. The Biden administration could effectively put an end to that rule by simply choosing not to defend it in court.
5) Amending federal laws to preclude class and collective action waivers
In Epic Systems Corp. v. Lewis, the United States Supreme Court confirmed that class and collective action waivers can be enforceable. It is no secret that, in response, many employers have implemented arbitration agreements that include class and collective action waivers as a means of avoiding the large wage-hour class and collective actions that have become so prevalent over the past two decades.
Is it possible that the Biden administration might push for legislation that would effectively put an end to such class and collective action waivers? While there has not been much buzz about this issue, it certainly seems like it would be something the Biden administration might consider if it wanted to have a large impact on wage-hour law. Of course, whether and how they could accomplish it is another matter entirely.