With the election over and the results showing Democrats taking over the House of Representatives and the Republicans retaining Senate control, what does it mean for employers?  It is expected that the House Democrats will push a pro-labor and regulatory agenda as well as an aggressive oversight of the Executive Branch.  The Senate Republicans will likely continue staffing the Federal courts, which will have a long-term impact on employment cases, and thus employment policy.

The House Democrats will start out in the new year either confirming Nancy Pelosi as House Speaker or electing a new House Speaker.  Once done, it is likely to start various investigations into the Trump administration activities.  In particular, the House Committee on Education and Labor, led by Virginia Representative Bobby Scott, will focus on a variety of agencies including most of Department of Labor (DOL) and the National Labor Relations Board (NLRB).  It may also push agencies such as the Office of Federal Contract Compliance Programs (OFCCP) and Equal Employment Opportunity Commission (EEOC) to be more aggressive in their discrimination enforcement activities. 

The Democrats will likely push a variety of pro-labor bills including banning compulsory arbitration (e.g, Restoring Justice for Workers Act) and try to amend the Federal Arbitration Act, which provides for contractually based compulsory and binding arbitration.  This results in an arbitration award entered by an arbitrator or arbitration panel as opposed to a judgment entered by a court of law. In an arbitration, the parties give up the right to an appeal.

In addition, there will likely be a push for a new federal minimum wage of $15 per hour (Raise the Wage Act). The House may also pass a law amending the Fair Labor Standards Act (FLSA) by increasing the wage required, like under the Obama era regulations that were struck down, for an employee to be exempt.  Exempt classification of an employee is dependent on the work performed.  However, if the exempt employee is making less than the required minimum, currently $455 per week, then the employee, although the work is exempt, is considered non-exempt.  As it stands at this point, new exempt regulations will be proposed by the DOL in early 2019.

There will likely be a mandatory sick leave proposed, which should supersede state laws, including Michigan’s new law.  With all the state and local jurisdictions passing paid sick leaves, this type of law would be something employers would likely support.  Moreover, the House will push more laws to secure the rights and access enjoyed currently under the Affordable Care Act.

It is also expected that the “Workplace Democracy Act” would be reintroduced to make it easier for workers to form unions by way of “card check” procedures, contrasting with the current secret-ballot process and potentially subjecting workers to union pressure and intimidation.  The bill would also expand the definition of joint employment for collective bargaining purposes, require mandatory arbitration to obtain a first contract, and generally tilt NLRB union election rules in workers’ favor.  The bill may also try to codify Browning-Ferris joint responsibility.  Under the Browning-Ferris standard “two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  The primary inquiry is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees, regardless of whether the company has in fact exercised such authority.

Further, many immigration initiatives from legalizing DACA to employment visa to complete immigration reform may be proposed.  The Democrats may trade funding for Trump’s border wall for a legalization process for DACA and possibly expand the time frame for coming to the U.S.  This scenario could make it to President Trump’s desk for signature.

On the Senate side, the nominations of Scott Mugno to head the Occupational Safety and Health Administration (OSHA), Cheryl Stanton to lead the DOL’s Wage and Hour Division, and Mark Gaston Pearce to serve a third term on the NLRB may still stall. Same with the EEOC with Janet Dhillon, who was nominated to serve as chair of the five-member commission in June 2017, Daniel Gade, who was tapped a month later to serve as a commissioner as well as current EEOC commissioner, Chai Feldblum, a Democrat who was selected in December to serve a third term, and Sharon Fast Gustafson, nominated to take over the agency’s long-vacant general counsel’s position.  Michael Eastman stated that there could be a possibility that the EEOC may not have enough Commissioners to conduct business if the confirmations continue to stall.

With a divided Congress, it is expected that not much will change in the next two years. Michael Eastman, a senior vice president for policy at the Center for Workplace Compliance, an employer organization that helps its members comply with work law, said in an interview with Law360 he wouldn’t write off the possibility of the parties coming together to pass workplace legislation. But they’ll have to think small to do so, he said.  At least the markets are already looking at a divided congress as a positive, which should positively impact retirement plans.  ASE will report on any new proposed laws that will likely impact employers in the new year.

Source:  Littler 11/7/18, Wall Street Journal 11/7/18. New York Times 11/7/18, Law360 11/7/18