ANALYSIS
As the new Secretary of Labor Marty Walsh takes the helm of the U.S, Department of Labor (DOL), he will find himself running a sprawling bureaucracy that already has been hard at work for months implementing President Biden’s agenda while undoing actions taken by the Trump Administration.
Perhaps the most active part of DOL is also the one that readers are most aware of—the Occupational Safety and Health Administration (OSHA)—and the president lost no time in giving it marching orders on Jan. 21, immediately after his inauguration. At Biden’s direction, by the end of January OSHA issued a comprehensive COVID-19 guidance document for employers about what they should do to maintain a safe workplace.
OSHA also will deliver Emergency Temporary Standards (ETS) regulations for employers any day now, and has announced enforcement initiatives targeting possible violations of federal rules and standards regarding COVID-19. The ETS had been long sought by Biden’s labor union allies.
DOL under Trump had resisted developing ETS, which were believed to be unnecessary and would create difficulty in making changes quickly when they were needed. Instead, OSHA took the path of issuing a series of guidance documents which it believed to have the force of law. Those guidances were subject to frequent updates throughout 2020 as knowledge grew and recommendations changed.
This new emphasis on COVID-19 safety extends into a corner of the department that receives little public attention—the Mining Safety and Health Administration (MSHA), which also has adopted a new guidance document similar to the Jan. 29 document issued by OSHA. At last report, MSHA officials had not yet decided whether ETS rules are necessary or appropriate for that industry.
“Millions of workers still do not have the strong COVID-19 protections they need to be safe at work,” declared Rebecca Reindel, AFL-CIO safety and health director. “Marty Walsh’s strong leadership will be needed to urgently issue a strong, comprehensive OSHA COVID-19 emergency temporary standard to set workplace safety rules, accompanied by strong enforcement to ensure workers are protected.”
Walsh stressed during his confirmation hearings that he does not wish to turn OSHA enforcement into a confrontational crusade predicated on the view that employers generally are unwilling to following safe practices, and intends to employ a more collaborative approach.
“We should be working with OSHA, working with the administration and working with members of this committee to talk about the importance of bringing OSHA back as an agency that is an agency to help workers and help employers and not put in the middle of both,” he said during his Feb. 4 Senate confirmation hearing. Throughout my career, I’ve led by listening, collaborating and building partnerships.”
After he was confirmed, Walsh won plaudits from both the National Safety Council and the U.S. Chamber of Commerce. He was serving his second term as mayor of Boston when the President, described as a personal friend, picked him out to be labor secretary. Before that, he had a long career as a Massachusetts state representative and as a union executive.
It remains to be seen how reasonable and accommodating he will be given that some unions wield claims of unsafe working conditions as a major weapon in organizing campaigns. They undoubtedly relish the prospect of recruiting OSHA as an ally in these efforts. It also is easy to imagine how almost any employers could be found violating the agency’s new highly-detailed 6,000-word COVID-19 guidelines, expected to be codified as regulations.
In addition, it doesn’t require too much of a stretch of the imagination to see how OSHA could exploit the General Duty Clause on behalf of unions seeking to organize employers, if the agency wishes to go down that road.
If you think this conjecture a bit too wild, consider that when he was mayor of Boston, two of Walsh’s top aides were convicted of extortion after they held up permits for an event organizer unless it agreed to hire union workers.
Walsh was not tied to the scheme, and the judge, who was rebuffed by a higher court for attempting to dismiss the charges earlier, in the end set aside the jury’s verdict against his aides. While Walsh publicly repudiated his aides’ actions, he remains a strong union advocate, and in the past pro-union officials in California, for example, targeted warehouse operators and employee leasing firms unions were seeking to organize for special enforcement actions.
Regulating Wages and Roles
Workplace safety is not the only area of work life that falls under the aegis of DOL. It also is responsible for enforcement of national wage and hours laws, including overtime regulations, leave rules, and definitions of work status that apply to independent contractors and those who work for franchises.
One of the first actions taken by the department when President Biden took office was to put a hold on Trump Administration rulemakings that had been adopted to deal directly with these last two issues.
In January 2020 DOL adopted a rule defining joint employer status for employees who work in franchises. This has been a front burner issue for unions trying to organize these employers, including a long-standing campaign that is attempting to unionize employees at McDonalds restaurants, and they were not happy with the changes.
At the behest of 18 state attorneys general, a federal judge blocked the rule from going into effect last September, and Biden’s labor department announced its intention to rescind it. This means the previous joint employer position remains in effect, unless and until the new DOL decides to come up with a different one.
Over the years, various federal agencies have staked out different positions on what constitutes joint employment status. An exception is OSHA, which has long held that companies are considered joint employers falling under its jurisdiction when, for example, staff leasing firms and their corporate customers share responsibility for employees’ safety compliance.
In another not unexpected move, the Biden DOL has proposed eliminating the independent contractor rule that had been finalized by the Trump DOL on Jan. 7, just 13 days before the inauguration. The new rule was scheduled to take effect on March 8, but the new DOL delayed that date and has indicated it intends to reverse it.
The rule establishes a new, simplified test for determining whether a worker is an employee or an independent contractor but comes up against promises made by Biden during the campaign and legislation backed by the Democrat majority in Congress to adopt a federal standard modeled on the “ABC” test that the state of California imposed last year.
“These early moves reiterate that independent contractor and joint employment issues are a top priority of the DOL under President Biden,” observe attorneys Susan Harthill, Elizabeth Johnston and Russell Bruch of the Morgan Lewis & Bockius law firm. “Employers should therefore continue to review how their employees are classified and remain diligent over the use of contingent workers, vendors, franchises, and other business partners.”
During the Trump Administration, DOL also finalized new wage and hour regulations that went into effect in January 2020. The new rules set revised salary levels for determining who are exempt employees which were different from what unions and their advocates had sought. It is possible that the Wage and Hours Division of DOL under Walsh may seek to reopen this rulemaking, but it would require the devotion of enormous resources and time to deal with the issues it would raise.
Among other changes employers are likely to see is an end to the Wage and Hour Division’s practice of issuing opinion letters intended to clarify issues raised by employers regarding particular circumstances. The Trump DOL had resurrected the issuance of such letters, which had been abandoned during the Obama Administration.
In addition, the new DOL already has eliminated the Payroll Audit Independent Determination (PAID) program. It had allowed employers an alternative method for self reporting and rectifying federal overtime and minimum wage violations without the worry of an extended statute of limitations, penalties and threat of private litigation or attorneys’ fees. However, lawyers saw the program as having little value because an employer could still face state law investigations and liability, so it is not likely to be missed.
