The First
100 Days
for Employers Under the
Biden Administration
By JENNIFER ROBINSON and SARAH BELCHIC
The impacts of a new presidential administration are always a topic of conversation. This is especially so within the first one hundred days, where the newly elected president and his administration begin to demonstrate those sentiments and positions that will be present over the next four years. President Biden has made commitments to focus on pressing issues including the COVID-19 pandemic, workers’ rights, and social justice. There are, however, certain pursuits of the new administration that employers should be aware of. Those include the effort to raise the federal minimum wage, the push to prohibit pre-dispute arbitration agreements, and sweeping legislation to amend the National Labor Relations Act.
require employers to place themselves under a hiring freeze or, in the alternative, reduce their workforce. Employers may also consider what roles and jobs they can reasonably outsource – which may decrease labor cost and allow the employer to meet the demand of increased wages. Regardless, it is important to recognize that an increase in minimum wage is on the horizon under the new administration and employers should develop a strategy that best suits their business and work environment.
Abolition of Arbitration Efforts to Raise the Federal Minimum Wage
The Biden administration has made it clear that raising the federal minimum wage is a top priority. It has been eleven years since the federal minimum wage was raised to its current value of $7.25, and the effort to increase the minimum wage has appeared on many fronts. Although it has recently become clear that the increase in minimum wage will not be included in the American Rescue Plan – the most recent COVID-19 relief bill – identical versions of the Raise the Wage Act of 2021 have independently been introduced in the Senate and House. The act would amend the Fair Labor Standards Act to gradually increase the federal minimum wage from $7.25 to $15.00 over a five-year period. As drafted, the bill would increase the minimum wage this year to $9.50; $11.00 in 2022; $12.50 in 2023; $14.00 in 2024; and then, $15.00 in 2025. Thereafter, the minimum wage would index to median wages. Additionally, two Republican senators have released their own proposal – the Higher Wages for American Workers Act. Under this plan, the federal minimum wage would gradually rise to $10.00 by 2025, then be adjusted for inflation every two years. This plan would also implement a slower, “phase-in” process for small businesses. Although less aggressive than the Raise the Wage Act, the release of the Higher Wages for American Workers Act indicates some level of bipartisanship on this issue under the current administration. Additionally, many states have already raised or have voted to raise state minimum wages above the federal level, such as Florida, California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York. While there are overall benefits businesses can expect from an increase in minimum wage, (e.g., with more disposable income, the population will gain more spending power, which can result in an increase in both demand and business for employers), employers should consider analyzing their workforce and pay policies before any minimum wage act passes to assess difficulties they may encounter. For example, employers will want to consider how much of that minimum wage increase can reasonably be passed along to its consumers, clients, and customers. Additionally, the increase in minimum wage could 34
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In response to certain social movements (e.g., the #MeToo Movement) and after the United States Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), in which the Court held that class and collective action waivers in arbitration agreements are lawful under the NLRA, there has been a significant effort to minimize the use of arbitration to resolve disputes. The abolition of arbitration agreements has been a major point for President Biden as he has committed himself to expanding workers’ rights – including workers’ ability to litigate disputes in court. In past congressional sessions, several legislative efforts to nullify mandatory, pre-dispute arbitration agreements have been introduced, and may be reintroduced during the current session. Those include the Forced Arbitration Injustice Repeal Act, the Restoring Justice for Workers Act, and the Ending Forced Arbitration of Sexual Harassment Act. These bills range from invaliding a wide array of pre-dispute arbitration agreements, to invaliding only those agreements requiring arbitration of sex discrimination disputes. Although no action on these bills has yet been taken, they are indicative of a rising sentiment that mandatory, pre-dispute arbitration agreements in employment contracts should be prohibited. As such, employers should be prepared to address their mandatory arbitration agreements should any antiarbitration bill become law.
The Protect the Right to Organize Act
One of the most expansive pieces of legislation that the new administration is supporting is the Protect the Right to Organize Act. The PRO Act’s stated purpose is to expand unionization, enhance remedies for unfair labor practices, safeguard the right to strike, and permit “fair share” union dues. Overall, the PRO
