It has been just one month since the inauguration of Joseph Biden as the 46th president of the United States, and he has been moving quickly to change the wage and hour landscape. This Lightbulb illuminates some of the more important developments affecting wage and hour law taken during the first 30 days of the Biden administration
- Fight for $15. The Biden administration made clear that increasing the minimum wage to $15 is a top priority. The proposed increase was included in President Biden’s proposed $1.9 trillion coronavirus relief bill and in the legislation introduced in the House on February 19, although President Biden has acknowledged that the minimum wage proposal might not be included in the final bill. On January 22, President Biden issued an executive order directing the Office of Personnel Management to report recommendations to adopt a $15 minimum wage for federal employees. He also indicated that he supports requiring federal contractors to pay a $15 per hour minimum wage. Meanwhile, on January 26, Democrats in the House and Senate introduced the Raise the Wage Act of 2021, which would raise the minimum wage to $15 by 2025.
- Secretary of Labor. On January 7, 2021, then-President-elect Biden announced Boston Mayor Marty Walsh as his nominee for secretary of the U.S. Department of Labor (DOL). On February 11, the Senate Health, Education, Labor, and Pensions Committee advanced his nomination to the full Senate by a bipartisan vote of 18-4. Once confirmed, Mayor Walsh will help implement a number of Biden administration policy changes, including those related to wages. Notably, as mayor of Boston, Marty Walsh was also a strong proponent of a mandatory $15 minimum wage.
- Freezing Pending Rules. Hours after his inauguration, President Biden directed executive agencies to delay all non-emergency rulemaking and regulatory activity pending review by his administration. The DOL subsequently proposed to delay the effective date of labor regulations finalized during the final days of the Trump administration, including the tip rule (published December 30, 2020) and the independent contractor rule (published January 7, 2021), by 60 days to April 30, 2021 and May 7, 2021, respectively. We anticipate that these rules will be delayed and that neither rule will become effective in the form published.
- Wage and Hour Division (WHD) Personnel. President Biden has not yet nominated anyone to serve as administrator of the WHD. On Inauguration Day, President Biden appointed Jessica Looman to serve as the WHD’s principal deputy administrator, and she is currently the senior-most official within the WHD. Before joining the WHD, Ms. Looman served as the executive eirector of the Minnesota State Building and Construction Trades Council.
- Withdrawing WHD Opinion Letters. In the final weeks of the Trump administration, the WHD issued a flurry of opinion letters. Since Inauguration Day, the WHD has already withdrawn three of those opinion letters: FLSA2021-4 (addressing restaurant tip pools); FLSA2021-8 (addressing the independent contractor status of distributors); and FLSA2021-9 (addressing the independent contractor status of motor carriers). The WHD explained that the issuance of these opinion letters was premature as they relate to the new tip and independent contractor rules that had not yet gone into effect. More recently, the WHD withdrew two opinion letters issued in 2019: FLSA2019-6 (addressing the independent contractor status of service providers in the so-called “gig economy”) and FLSA2019-10 (addressing whether time spent in a truck’s sleeper berth during multi-day long-haul trips is compensable). Going forward, employers may not rely on these withdrawn opinion letters as a defense to liability. The WHD is likely to withdraw more opinion letters in the coming weeks and months as it continues to review guidance issued during the prior administration. It remains unclear whether the WHD will continue the practice of issuing opinion letters in response to specific inquiries, and/or whether it will revert to the Obama-era practice of issuing Administrator’s Interpretations on general subjects such as independent contractor and joint employment.
- Ending PAID Program. On January 29, 2021, the DOL abruptly ended the Payroll Audit Independent Determination (PAID) program. The PAID program began in March 2018 as a pilot program to allow employers an alternative method to rectify overtime and minimum wage violations of the Fair Labor Standards Act (FLSA). Under the PAID program, employers were able to self-report a wage violation, submit a calculation of back wages to the DOL, and enter into an agreement to pay 100% of back wages owed over a two-year period. In turn, the DOL would supervise and approve the payment and provide a release as to the reported issue. During the Trump administration, the WHD touted the success of the PAID program, noting that it took half the resources of other compliance actions and yielded ten times the back wage recovery per staff hour. Nevertheless, the program has ended.