Overall, the chose of Su for Deputy Secretary of Labor and the early nomination of Frederick may indicate that the White House’s plans center on enforcement of workplace safety and prosecution of current labor standards and less on creating new regulations in the Labor and Employment area.
The country may be highly polarized but everyone can agree that the top priorities for nearly any government leader, be they a president, a governor or a mayor, is the pandemic. But what about the other, lesser, priorities? It may be tough to pinpoint what the Biden administration’s regulatory aims are as to employment and retirement policy. It may also be years before those policies are in the spotlight because of the current COVID crisis. A look at who the White House has named for leadership posts could help employers get an idea of what regulatory changes could be coming.
Biden’s nominations to the Securities Exchange Commission and the Department of Labor (SEC and DOL respectively) could influence federal labor and employment policy. To some extent, the leadership in those agencies may differ from the White House in the speed in which they enact certain policies, and the specifics of the policies themselves. The devil may be in the details as they say, but it’s also where movement begins.
As to the DOL, Biden’s administration began reviewing that agency’s operations prior to the inauguration. Sources indicate that this shows the Biden administration may be gearing up for aggressive regulatory actions in the DOL, possibly resulting in more progressive policies than the Obama administration. Many think that the focus of this scrutiny will be directed towards work place safety. An indication of that is Biden’s early nomination of James S. Frederick, formerly a workers’ advocate for the United Steelworkers, for assistant secretary for OSHA.
Similarly, Biden’s choice of Marty Walsh to head the agency may portend less than his choice of Julie Su for Deputy Secretary of Labor. While she was the Labor Commissioner in California, enforcement activity hit a high point and she spearheaded a media campaign to inform workers of their rights. She is known for combining high impact litigation with community education programs. That could mean greater investigation and enforcement by the Employee Benefits Security Administration. That may mean that the Biden administration’s focus on DOL may be on worker’s rights in terms of wage and benefits.
Many sources have focused on Biden’s COVID relief package and Congress’s efforts to increase the minimum wage as the two major elements of employment law that will be the subject of policy debate in 2021 and beyond. But other, smaller, issues like the multi-employer pension problem could be ripe for resolution. Additionally, some sources say that the Biden Administration may push back on the growing trend of classifying workers as independent contractors rather than employees. Congress was working on a bill, called the Worker Flexibility and Small Business Protection Act, in September of 2020 on this topic which could pick up steam in the months to come. It also remains unclear on whether Biden’s DOL will continue to use Opinion Letters, reinstated by the Trump Administration after being terminated for “Administrator Interpretations” under Obama. Opinion letters could be more helpful to employers than interpretations, as some feel that they have more finality.
As for the SEC, it’s more clear that Biden’s choice of Gary Gensler shows that enhanced consumer enforcement is likely. Gensler previously held leadership positions at the Commodities Futures Trading Commission, where he was active in creating new rules on swaps. This is unsurprising as he has a previous background in prosecuting large banks for violation of LIBOR.
Overall, the chose of Su for Deputy Secretary of Labor and the early nomination of Frederick may indicate that the White House’s plans center on enforcement of workplace safety and prosecution of current labor standards and less on creating new regulations in the Labor and Employment area. In contrast, the nomination of Gensler may indicate a willingness to create new, targeted regulations in the securities area.
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
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