Six high-stakes employment rules that could tilt on the election

Employers have been wrestling with significant uncertainty on a host of high-stakes employment law issues throughout 2024.

Attorneys say Tuesday's presidential election could provide some — although likely not all — of the answers businesses have been waiting on.

As we've noted, the Biden administration has unveiled a wave of new rules and regulations that have altered the relationship between employee and employer — changes that have been met with significant opposition and legal challenges from business groups. Many critics of the changes say they will increase costs and regulatory burdens for businesses.

Michael Lotito, co-chair of law firm Littler’s Workplace Policy Institute, said a victory by Vice President Kamala Harris would mean employers can expect a continuation of those efforts. A victory by former President Donald Trump, on the other hand, would mean a slowdown of those efforts, he said. It could also mean a reversal of several policies affecting employers, if past history involving changes in administration is any indication.

“Theres a lot at stake. We are watching it all,” Lotito said.

Here's a look at regulations, both proposed and final, with futures that are likely contingent on the winner of Tuesday's election.

1) Overtime pay and eligibility regulations

The Department of Labor, on April 22, 2024, finalized a new annual salary threshold under which non-exempt workers would be eligible for overtime, which went from $35,568 to $43,888 as of July 1, 2024

On Jan. 1, that threshold will increase further, to $58,656. The salary threshold then would update every three years based on wage data, according to the Department of Labor. Over the first two updates, more than 3 million workers would be newly eligible for overtime, the agency said.

However, the new rule is already on hold in Texas and is also facing its own court challenges in Florida and Texas, among other locations. A Harris administration would likely fight those challenges, while a Trump administration could roll back the rule or implement lower thresholds.

https://www.bizjournals.com/atlanta/news/2024/11/03/2024-presidential-election-workplace-regulations.html?utm_source=st&utm_medium=en&utm_campaign=me&utm_content=AT&ana=e_AT_me&j=37329063&senddate=2024-11-04&empos=p3

Meanwhile employment attorneys have noted the rule bears strong similarities to a 2016 overtime rule put forth by the Obama administration that ultimately was overturned by a federal judge after a nationwide injunction was issued against the rule going into effect. After taking office, the Trump administration dropped an appeal of the injunction and crafted its own rule on overtime thresholds.

2) Stricter independent contractor regulations

The Department of Labor in 2022 proposed a new rule that would rescind a Trump-era rule on classifying independent contractors. It finalized the rule in March of 2024, with experts saying it makes it harder for employers to classify workers as independent contractors.

This rule also was met with a series of legal challenges to the agency’s authority but as of yet no injunction has been issued.

Under a Trump Administration, it’s likely this rule would be rolled back to the Trump-era rule providing for greater leeway, Lotito said.

3) National Labor Relations Board’s ongoing decisions

The current NLRB has issued a number of decisions designed to help workers in union elections, including shortening certain time frames and making it easier to get to a vote. It has also weighed in against non-solicitation agreements and non-disparagement clauses.

It also includes decisions regarding efforts to “chill” worker organizing and speech activities, leading to a legal battle with billionaire Tesla CEO Elon Musk.

Under a Harris administration, Lotito said, there would be four more years of pro-union and pro-worker decisions, while a Trump administration would likely remove the NLRB chief the first day and slow down some of the dramatic changes it has made.

4) The OSHA "walk around" rule

The new rule, from the Occupational Safety and Health Administration earlier in 2024, changes the so-called "walk around" rule regarding workplace safety inspections to allow non-employees to participate as a representative of the workers

OSHA has always had rules about conducting inspections of the workplace, and there have been rules about both the employers and employees being represented on such inspections. But opponents claim the new rule would allow activists and others to access job sites with no substantial limitations.

Opponents and business groups have filed lawsuits against the agency, focusing on OSHA not having the statutory authority to impose the new rule and that Congress did not give the agency power to allow third parties access to employer workplaces.

5) FTC's noncompete ban and its ongoing court challenges

The Federal Trade Commission proposed a rule early in 2023 that would do away with noncompete agreements. It also included provisions against broad non-solicitation agreements and training repayment plans for employees who leave.

The rule, finalized in 2024, would impact 30 million Americans and thousands of businesses — freeing a multitude of workers from existing clauses. Of course, that is only if the agency can win against a number of court challenges to its authority. It is also currently subject to an injunction from a judge in the Northern District of Texas that prevents the rule from going into effect.

The legal challenges against the FTC also seem far more likely to be successful after the Supreme Court decision in Loper Bright Enters. v. Raimondo (The Department of Commerce) which overturned four decades of judicial deference to federal agency interpretation of legislation. Under the so-called Chevron framework, federal agencies were given wide latitude on interpreting any ambiguity in laws without explicit guidance from Congress.

Under the Trump Administration, Lotito said newly appointed commissioners would likely drop their defensive efforts in court, which would mean the effective end of the rule. The Harris administration would likely continue its efforts to fight those challenges in court, appealing to higher courts even if the odds are low it succeeds.

According to Littler Mendelson PC's 12th annual employer survey, many executives already are dialing back their use of noncompete agreements. The survey tracked responses from 400 lawyers, C-suite executives and human-resources professionals.

6) More potential for state and local action on the workplace

While either a Harris or Trump Administration is likely to flex its regulatory muscles, it's likely Congress will be divided, which means there will be little movement on big issues, according to Shannon Meade, executive director of Littler’s Workplace Policy Institute.

Instead, the actions will lie with state governments. That includes paid leave laws, minimum wage laws and items such as the tip credit.

“Unless the 119th Congress is aligned with a new administration, we are in a divided government and there is going to be federal legislative gridlock for the next four years,” Meade said. “All of that will give rise to increase state and local activity."

Those governments have been active on issues affecting employers in recent years.

In 2023, for example, Minnesota banned the enforcement of new noncompetes, joining California, North Dakota and Oklahoma.

Several states and cities have passed pay transparency laws.

Others have passed legislation that has led to the elimination of diversity, equity and inclusion departments at universities and other employers — decisions that have had ripple effects for private employers.

0 comments