Recent Employment Law Shifts under the Biden Administration
As was expected, the Biden Administration has altered some of the prior administration’s labor and employment initiatives. Recently, President Biden signed the American Rescue Plan Act (“ARPA”) into law, extending certain tax credits for COVID-19-related leave but not extending the obligation to provide such leave. The new Department of Labor (“DOL”) also recently indicated its intent to rescind both the joint employer rule and the independent contractor rule promulgated by the previous administration. This alert provides information on each of these developments.
- Employers No Longer Required to Provide Paid COVID-19 Leave; Tax Credits for Voluntarily Provided COVID-19 Leave Extended
The Families First Coronavirus Response Act (“FFCRA”) required employers with less than 500 employees to provide them with paid leave in certain COVID-19-related situations, with employers receiving tax credits for the wages paid under the FFCRA. The FFCRA expired per its terms on December 31, 2020. Under the ARPA, covered employers can continue to provide FFCRA benefits voluntarily and receive tax credits for such payments through September 30, 2021. The ARPA also expanded the reasons that COVID-19 leave can be provided to include: (a) obtaining a COVID-19 immunization; (b) recovering from an injury, disability, illness or condition related to COVID-19 immunization; and (c) seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID or the employer requested the test or diagnosis. See our previous guidance on the FFCRA here and here.
- DOL Proposes Withdrawing Independent Contractor Rule
In January 2021, the DOL published a Final Rule with a more lenient standard for determining independent contractor status (see our prior guidance here). The Final Rule, which had not yet gone into effect, would have expressly adopted the economic realities test for Fair Labor Standards Act (“FLSA”) classification decisions for analyzing independent contractor status. Recently, the DOL announced a proposal to withdraw the Final Rule, which would return classification guidance to prior, less lenient interpretations.
- DOL Proposes Rescinding FLSA Joint Employer Regulations
On January 16, 2020, the DOL published more business-friendly regulations that narrowed the scenarios under which multiple businesses could be defined as joint employers under the FLSA. In September 2020, a federal court held that these regulations impermissibly conflict with the language of the FLSA (see additional guidance here). Recently, the DOL announced a proposal to rescind the FLSA joint employer status regulations entirely. Doing so would return the joint employer test to prior, less company-friendly interpretations.
Federal guidance on these issues is complex and changing rapidly. If you have questions about these or any other workforce issues, please contact your relationship attorney or one of Honigman’s Labor & Employment attorneys.