While high unemployment has been a serious discussion in the world of COVID-19, President Joe Biden has promised plenty of new jobs to come now that he’s in the White House. How will any new laws or policy direction shape labor and employment regulations for companies? Will there be significant change that impacts the way businesses operate in Biden’s first 100 days?
In the fourth episode of Insider Insights: 100 Days of Biden, Joe Centeno, co-chair of Buchanan's Labor & Employment section; and Tim Costa, a principal on Buchanan's Federal Government Relations team in D.C., discuss what's possible in job creation under the new administration.
In this episode, Tim and Joe cover:
- How President Biden can achieve the task of adding new jobs.
- The contrast between President Biden and President Trump when it comes to keeping manufacturing jobs in the U.S.
- The future of the $15 per hour minimum wage and how that gets achieved.
- How COVID-19 impacted the labor market and whether the new COVID-19 relief bill can create new jobs.
- How the transmigration of workers from offices to the home will impact the labor market moving forward.
- California's Proposition 22 – what it does and whether this law can and will be adopted in other states or even nationwide.
Joe Centeno: Hello and welcome to Insider Insights: 100 Days of Biden, a podcast from Buchanan Ingersoll & Rooney. I am your co-host today Joseph Centeno, a shareholder at Buchanan and co-chair of the firm’s Labor, Employment, Benefits and Immigration section. So far on this podcast series, we have covered how the Biden administration may approach life sciences, transportation, and healthcare during the president’s first 100 days in office. If you have not listened to those yet, I definitely suggest you check them out.
On today's episode, I am joined by my colleague, Tim Costa, a principal on our government relations team in D.C. We are going to talk about how President Biden and his team may address labor and employment during his first three months in office. Tim, thanks for co-hosting with me.
Tim Costa: Joe, thanks for having me.
Joe Centeno: Tim, in contrast to former President Trump, President Joe Biden is poised to be a much more labor friendly Commander in Chief then his predecessor was. Yet how that viewpoint on labor ends up manifesting itself in the form of policies remains to be seen. Under President Trump, a core focus when it came to labor and employment was his push to keep manufacturing jobs here in the United States and penalize companies that took the jobs overseas. How will the Biden administration approach this? Is there any direct action he is taking, or will take, to change what his predecessor put in place?
Tim Costa: I think President Trump definitely used the carrot and stick approach. There were even some high-profile incidents when he was publicly trying to shame companies that were trying to take work overseas. He also worked with Congress to create a regulatory and a tax incentive that made it more advantageous for companies to keep jobs here, or even in some instances, bring jobs back. I think the focus from President Biden and Congress is really going to be aimed in large measurement at China.
President Biden has identified four critical sectors for the American economy that he wants to figure out ways to rescue jobs and ensure the supply chain for those critical elements. Here, they focus on semiconductors, advanced batteries, pharmaceuticals, and critical minerals. I think you are going to see both the President and Congress, really in a bipartisan fashion, try and tackle those issues and figure out how to resurge those supply chains here in America or at least, in some combination, with more friendly allies.
The United States finds itself so dependent on China like it did in the early parts of COVID-19 for things like PPE and, more recently, some of the challenges faced by the auto industry, with their challenges getting a sufficient number of semiconductors to keep up with manufacturing here in the United States. So, I think that’s one of the areas where there is a lot of bipartisan interest. I think you might see a different tone from President Biden, but I think in large measure, Congress and the President are going to continue to focus on bringing some of those critical sectors either back to our shores or at least back to friendlier places.
Joe Centeno: Tim, there has been plenty of discussion across the political spectrum about increasing the federal minimum wage to $15 an hour and how that can be done. Is this a realistic goal for the administration, and how do you think that happens?
Tim Costa: Well, Democrats tried to get the $15 minimum wage included in the reconciliation bill. That was probably their best opportunity to get this done. It failed. There is bipartisan interest in raising the minimum wage, likely at a more gradual level – in certain instances, only if tied to other things. I think it is an issue that is not going away. We do have a significant number; I think it was 42 members of the Senate and a significant number of House Democrats that still want to push for an increase to $15 an hour. That does seem to be unlikely, but I think you are going to see efforts to raise the minimum wage. My hunch is that outside of a reconciliation process that there will be an effort. Perhaps even a successful effort to raise the minimum wage to some number, $10 or $11 an hour, gradually over the next several years.
Joe Centeno: I think I heard that Senator Manchin had suggested $11 an hour at some point. Given that he has his newfound power in the Senate.
Tim, certainly COVID-19 has had quite an impact on employment in the United States and across the globe. Can new jobs be created through a COVID bill?
Tim Costa: Well, it is interesting that the COVID bill really focuses somewhat less on job creation. There is a lot of what I will call “job preservation” in there. There are efforts to stimulate the economy. I would say through the $1,400 checks to certain households and changes to the earned income child tax credit, a lot of that stuff is there to help people on the lower end of the income scale weather the storm of COVID. But really, what you saw in the bill mostly is significant bail out of states and localities that will certainly help public sector unions and other programs that are important at the state and local level. Because of reduced tax revenues some have certainly been in jeopardy. I think most people agree at this point, the best way to get the economy moving is to get the economy open. You already saw certain states, several large states, virtually reopen their economies in full. You now have several approved vaccines here in The United States, and while there have been some challenges to the distribution, I think you see millions of people now and older Americans getting vaccinated. I think that alone is really going to boost public confidence and get people back to work.
Joe, let’s turn the tables and get your perspective on a few topics. You mentioned at the beginning of the podcast that President Biden is likely to be a much more labor friendly president than Donald Trump. How do you see that shaping out?
Joe Centeno: You know, traditionally Republican administrations are focused on educating employers on the law, whereas democratic administrations traditionally are focused on enforcement. That contrast will hold true, I expect, with the Trump-Biden change. We know that President Biden has been a significant traditional labor and union supporter. We know that his Secretary of Labor appointee, Marty Walsh, is a labor advocate. So, we expect to see President Biden be a more labor-friendly president who will appoint labor friendly appointees to the National Labor Relations Board, The Department of Labor, the EEOC, and to all of the agencies that create the policies for employers and employees.
Tim Costa: I noticed with President Biden, when I watched him speak about jobs and job creation, he oftentimes qualifies and even mentions labor unions in the same breath.
Moving on . . . over the past year, we have seen perhaps the largest transmigration of employees ever as more Americans than ever are now working from home. Now that the vaccine roll out is kicking into high gear, can we expect any legislation to address the safety issues of returning to work? Can employers mandate that their employees get the COVID vaccine? I know a lot of these issues are front and center in the minds of many. Any thoughts?
Joe Centeno: We have experienced an incredible transmigration of workers from offices or places of work, who usually go to work, move to a place where they are working from home, or unfortunately not having a job. Due to the vaccines having COVID mitigated and perhaps subsequently herd immunity, we expect to return to some normalcy at some point. You might go to, perhaps, a hybrid – working in the office three days a week and working from home two days a week out of the five-day week. In this transition we are going to face a lot of bumps. Employers are going to face a lot of challenges because there are a lot of workers who really do not want to go back to an office setting. First of all, maybe they are concerned about the risks associated with taking a vaccine that had a quick FDA approval. So, employers are going to have to handle all of these issues and there will be a lot of them.
As for whether or not a vaccine can be made mandatory, the answer is yes. Employers absolutely can mandate vaccines, but a majority of them are not. Those that are looking to mandate vaccines are primarily in the healthcare as well as the education space and those in places where there is significant customer facing of their employees or their workers with the public. A lot of employers are not making the vaccine mandatory, and I think there is some good reasons for that as well because some recent studies have suggested that 30 to 40 percent of the population in the United States is very suspicious and would not want to take the vaccine. It would create a significant potential problem if you mandate the vaccine and 30 percent were forced and said they were not going to take it. That creates serious issues. It is also challenging for employers to administer and keep track of. If you have a significant number of employees, like a thousand employees, can you think about having to collect the data on who has the vaccine, whether you have the first shot or the second shot, who has gone through the whole process, and who has not?
There are a lot of administrative processes in making the vaccine mandatory. It also opens up potential claims under the Americans With Disabilities Act. Although the vaccine itself is not considered to be a medical inquiry or examination by the Equal Employment Opportunity Commission, there are a lot of questions around it that have to be asked that relate to existing medical conditions and other risks that are medical questions that would then have to be protected and kept confidential. And of course, with the knowledge of a disability comes the claim of disability discrimination. So, most are not making the vaccine mandatory although they certainly can under the law.
We already have also seen government action with respect to the workplace. President Biden through executive orders has already asked OSHA to determine whether or not a new standard of safe workplace in COVID needs to be created. So far OSHA has issued guidance, which us just that – guidance. They are not standards. I think we are going to see OSHA answer that affirmatively, and we are going to see a new temporary standard that employers need to meet to have a safe workspace.
Tim Costa: Lastly, in California, the recently passed Proposition 22 gives employers much more freedom, so they can classify their workers in terms of employees versus independent contractors. Can you explain what exactly this bill did? Does it make its way to other states? Do you think we can expect something similar at the federal level under President Biden?
Joe Centeno: Tim, this is the issue of the gig economy. Proposition 22 was a reaction to the state legislature’s passing of a bill into law that transformed most independent contractors into employees. So, Proposition 22 was an initiative that was supported by companies like Uber and Lyft carving out as an exception to that California law to preserve the status of independent contractors for workers that eventually served as drivers and delivery service workers. They would remain independent contractors on certain conditions. Those conditions included that they would be paid at least 120% of minimum wage, that they would receive certain health subsidies, and accident insurance.
The question you asked, Tim, is that whether Proposition 22 is going to make its way throughout the other 50 states or maybe come from Washington D.C. It really remains to be seen. I think that from a standpoint of how Proposition 22 is looked at, it is looked at as something that passed California, but the bill by many is viewed as not employee- or worker-friendly. I do not see that the Biden administration is going to get behind this movement of Prop 22 from a federal level because of that. I think there are too many perceptions and too many folks who have the view that the bill for Uber, Lyft, and Amazon in California is a win for big business and not a win for the small worker. I do not think from a perception-basis the administration wants to be on that side of the battle. Tim, you know this better than I. Though, in politics perception is reality.
Tim Costa: It is going to be one we are going to watch closely here in D.C. as it certainly pits some traditional allies against one another. Organized labor has been very interested in these classification issues, so I can see certain tensions mounting. The freedom that comes with the gig economy is something that a lot of people value – both folks who are working that industry as well as people who utilize the services of it. So, it does not really lend itself to a top-down National Labor Relations Board decision that would impact industries like that around the country. We will keep an eye on it here for sure.
Well Joe, we covered a lot here in a short amount of time. As always there is plenty to talk about when it comes to labor and employment as the world works its way back to normal after COVID-19. Before we go, I just want to thank our listeners for tuning into Insider Insights: 100 Days of Biden. To hear the latest from Buchanan Ingersoll & Rooney attorneys and government relations pros on what to expect under the Biden administration, please subscribe to our podcast on Apple Podcast, Spotify Podcasts, Google Podcasts or whatever you listen to. Until next time, I am Tim Costa alongside my colleague at Buchanan, Joe Centeno. Thanks for listening to Insider Insights: 100 Days of Biden.