December 23, 2016

Workforce and Labor Issues: What You Need to Know for the 115th Congress

Charles Merin

Many have worked assiduously for the past several years against a wide-range of  labor challenges that would have fundamentally redefined the American workplace. Proposals to change the definition of a joint employer relationship; a draconian increase in Federal overtime regulations; a Department of  Labor  philosophical  embrace of a fissured workplace; and much more, have elevated workplace issues  to  the top of many client’s issue priority lists. While the incoming Trump Administration and its’ Republican allies in Congress will likely succeed in repealing these initiatives, the speed with which these policies can be overturned remains in question.

The  proposed  overtime  regulations  which were  set  to  take  effect  on  December 1, provide a case in point. The Congressional Review Act is unlikely  to  provide  a  useful  vehicle  because the effective date far precedes  the  Trump  inauguration.  An  alternate  Trump  Administration regulation  dealing  with  this  situation  would  be  to  suggest  an  extended  notice  and  comment  period.  The  outgoing  Obama  Administration  would  be  unlikely  to  accept  a change as part of any Lame-Duck deal. Unless any  legislative  fix  were  part  of  a  privileged  legislative  motion  such  as  a  reconciliation  package,  Senate   Democrats   would   likely   use   cloture  rules  to  protect  the current regulation.

While the incoming administration’s rollback of current Department of Labor (DOL) regulations will  likely ensue pushback  from  congressional  Democrats,  there  are  sporadic  areas  of  common ground.  There’s  already  been general  bipartisan interest on an  RFI directed at the employee use     of electronic devises. Given the evolving key-players-workforcenature of the modern workplace, employees are increasingly working on their smartphones  and  laptops  around-the-clock.  This  has  sparked  interest  in  providing  clarity  on  when   and   how  employees  should  be  compensated  for  performing  work   on such devices  outside  of  scheduled  work  hours.  The  highly  antiquated  Fair  Labor  Standard Act, which was first passed in 1938, provides little clarity on this dilemma. The next Wage and Hour Division (WHD) administrator will likely explore this issue until some type of worker protection  regulation is established.

Institutional change will also  come  slowly  to  the  National  Labor  Relations  Board  (NLRB),  where  the term of the  current  General  Counsel  runs  through  2017,  The  current  2-1  Democratic controlled Board will run through most of next year. To quote from a recent client analysis of this situation, the International Franchise Association recently wrote, “While Trump will have the chance to appoint two new NLRB Board members right away, it may be potentially February or March until he offers his nominations; potentially months after that before they secure Senate approval; and possible   a year or more before the BFI precedent (dealing with the joint employer issue) can be reversed/ clarified. All of that is a long-winded  way  of saying that while “help is on the way”, it may be some time before it arrives.

Even a fundamental change in  Washington’s  approach  to  labor-management  relations  will  likely  not  impede  activity  in  “activist”  cities  and  states  around  the  country.  While  it  is  unclear  what   a Trump Administration might do about the  Federal  minimum  wage,  for  example  (make  no  change, modestly increase it, and/or continue to leave it in the hands of states and localities), labor issues will most certainly continue to churn outside of  Washington.  As  the  saying  goes,  “as  one door closes, another one  opens.”  Far less labor legislation at the Federal level will likely energize  more strategic engagement by the unions outside  of  Washington.  Ronald  Reagan’s  dream  was  for a devolution  of  power  from  Washington  to  the  states.  His  dream  is  likely  to  be  realized  as  state capitols and city halls become the flashpoint for policy engagement.

The larger issue for many is the insufficiency of both focus and knowledge amongst Washington policy makers,  about  the  realities  of  the  American  economy.  The  U.S.  economy  is  dominated  by       the service  sector,   which   requires   very   different   policy    imperatives    than    its’    agricultural and manufacturing counterparts. Layer on top  of  that  the  impact  of  the  sharing  or  “gig”  economy, an interwoven extension of the service economy, and people begin to realize just how far work in America sits outside of historical employment categories. Fifty years ago, workers were born and died within 100 miles of their birthplace. Their employment goal was to work  for  an  employer  for  their entire career and then retire  with  a  defined  benefit  pension  and  a  gold  watch.  Baby  Boomers sought out careers, and navigated a
n upward trajectory in their vocation of  choice.  Millennials largely view their fore-bearers  work  habits  with  disgust,  as  they  work  multiple  part-  time  positions  while  pursuing  their   personal   interests.   Clearly,   the   social   compact   defined   by  the  historical  relationship  between  an  employer  and  an   employee   is   undergoing fundamental   change.   Government   policies,    evolving    workplace    regulations,    and    a changing social compact will demand a  fundamental  future  redefinition  of  how  we  work  in  America, with  a  greater  emphasis likely  upon  the  portability  of  job  credits  and  training.  Change is coming;  what  is  less  clear  is  how  fast  and  in  what  ways  it  will  begin  to  take  hold.  States  and municipalities may again become the petri dishes for its growth.

One of our clients, the Workplace Policies Institute, also put together an extremely thorough analysis of the post-election labor front that we highly recommend. We share it with you with their concurrence.

Chuck Merin

Chuck, Prime Policy Group’s executive Vice President, possesses more than 45 years of Washington experience, beginning with service as a congressional staffer. He has established himself as the premier lobbyist for service and hospitality industry interests in Washington. He is an expert in building legislative coalitions and helping clients forge effective, long-term relationships on Capitol Hill. Chuck is perhaps best known for his close affiliation with the Blue Dog Coalition, an alliance of more than two dozen pro-business, conservative House Democrats whose votes are much coveted.