December 23, 2016
Workforce and Labor Issues: What You Need to Know for the 115th Congress
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 nature 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.