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.   

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 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 

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 anti-arbitration 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 Act would effect over 50 changes to the NLRA – many of which would impact all private sector employers regardless of whether their workers are unionized.  

One such impact is that state “right to work” laws – laws that prevent employees from being compelled to join unions or pay dues as a condition of their employment – would be overturned, permitting agreements that require all employees within a bargaining unit to pay dues to a labor organization as a condition of employment.

Additionally, the PRO Act would drastically increase the NLRA’s coverage.  For example, the PRO Act would codify the “ABC” test for determining whether an individual is an independent contractor.  Under the ABC test, a worker would be considered an “employee,” and therefore covered by the NLRA, unless the hiring entity demonstrates certain facts.  Similarly, the PRO Act would narrow the definition of “supervisor,” meaning that employers would not be able to rely on those individuals to exercise certain employer rights under the NLRA.  The PRO Act would also expand the scope of “joint employer.” For example, those employers that contract with staffing agencies could be considered a “joint employer” under the new act.      

The PRO Act would also generally limit employers’ actions.  For example, employers would be required to turn over employees’ personal contact information prior to an election or to allow employees to use employer electronic systems to organize and engage in protected activities.  Additionally, the PRO Act would require employers to disclose payments made for labor relations advice and services they receive from their attorneys.  

Further, much like the efforts mentioned above, the PRO Act would restrict the application of arbitration agreements.  Specifically, it would prohibit any attempt to enter into or enforce an agreement in which an employee waives their right to collective or class action, overruling the Supreme Court’s decision in Epic Systems.  Yet, the PRO Act would compel parties bargaining for an initial collective bargaining agreement to submit to mediation, and eventually binding arbitration, should they not reach an agreement within 90 days of the parties commencing negotiations.  

Finally, the PRO Act would expand penalties for violations of the NLRA by including civil penalties for non-compliance, which could be enforced via civil action in federal court and by applying penalties to the employer’s individual directors and officers. 

As employers look forward and past the first one hundred days of President Biden’s administration, employers should remain aware of these efforts and be prepared to evaluate and revise their policies, practices, procedures, and agreements as they pertain to these topics.