2021 Strategic HR Planning: Biden’s State and Federal Policy Changes

Though Trump’s administration will likely be struck in a lame duck period until late January, there are already changes afoot after the election results. Firstly, the deadline for inspecting I-9 documents in-person has been extended to December 31^st. Secondly, there’s been some clarification on PPP loan money and taxes. Companies that have spent PPP loan money on anything—rent, mortgage, business supplies, etc.– cannot claim it as a deduction. With the election results in, it’s time for organizations to begin preparing for some radical changes. Starting in January, the Biden administration will likely usher in some changes at the federal and state levels that will significantly impact how companies approach their employee policies, employee handbooks, ACA reporting, and more. Read on for the HR updates you can anticipate in 2021 and beyond.

 Federal Level HR Planning

These are the changes that MP’s HR services team anticipates on a federal level:

• More PPP programs. There is still over $100 billion in unused funds that the government will be likely to want to make available for businesses—both those that have and have not already gotten PPP loans. This iteration of the program will be more likely to be focused on smaller businesses and businesses that can show a significant decline in revenue due to the pandemic.
  
• Liability protections. The government is working to potentially address liability protections for businesses regarding COVID-centric situations involving employees, vendors, clients, and/or customers. This would likely be included in a stimulus bill.
  
• Expansions to the ACA. Biden was Vice President when the ACA was originally passed, and he will want to expand it in a few ways. Employers can probably count on the employer mandate staying in effect. Employees may also be allowed to use exchange subsidies to pick different health insurance plans from the marketplace. Biden has also indicated that he’d like to add a Medicare expansion, allowing people to sign up for Medicare starting at 60 years old. Since many people work until 65 to continue receiving health insurance through their employers, this could mean many workers retire about 5 years earlier. Biden has also mentioned a public option for Medicare, allowing more people to sign up for it. This will potentially reduce the workforce in other age demographics, too.
  
• Expansions to the Protecting Rights to Organize Act (Pro Act). The Biden administration will urge for passage of this bill, allowing more workers to pursue unionization efforts. They have said they’ll allow Union card signatures instead of secret ballot voting, ban Captive Audience meetings (mandatory meetings set by employers about unionization efforts), and ban state Right to Work laws. The government may also set a much stricter definition under this law of who can be an independent contractor. This will allow more people to be employees, and thus eligible to unionize. There will potentially be an expansion of the “Joint Employer” definition, thus putting more liability on employers like recruiting firms that indirectly control workers. The Biden administration is projected to expand the PRO Act to create personal liability for corporate officers when it comes certain labor law violations, such as harassment. Lastly, mandatory arbitration may be banned, allowing workers to pursue a grievance with their employers without arbitration
  
• More money and training for federal contractors. The Biden administration is projected to increase the wages for federal contractors from $10.10 to $15 an hour. Though it won’t directly affect private employers, this will push them to compete in terms of compensation. The administration will also likely reverse the Trump administration’s training ban on federal contractors, particularly on topics like unconscious bias and race relations. They may increase other diversity and inclusion efforts in hiring federal contractors.
  
• Wage and hour laws. The Biden administration has indicated they’d like to increase the federal minimum wage to $15 an hour. They’d like to eliminate the Tip Credit, which means employers with tipped employees will probably need to pay them more. Regarding classification, the exempt salary minimum threshold may be increased, making it harder to classify employees as exempt. In terms of classifying contractors, the ABC test, or 3-pronged test, seems to be preferred by the Biden administration. This will make it harder to classify employees as independent contractors.
  
• Paid leave. It’s likely that there will be a push for a nation-wide program created for workers that need to take time for an illness, an adoption, or the birth of a child.
  
• Immigration regulations. The Biden administration may push for mandatory E-Verify for all employers. This is a system that ensures workers are authorized to be employed in the states.
  
• Coronavirus measures. The Biden administration will be taking a few measures that are likely to affect employers. Firstly, it will probably create more testing sites and testing options, which will assist employers that have wanted to test workers and customers more frequently. Secondly, the administration will be working with the CDC for more evidence-based measures, including potential shut-downs and restrictions, as well as a federal mask mandate. Lastly, employers may be receiving “Restart packages.” This will include funding for small businesses to use towards PPE and COVID safety infrastructure and procedures, such as plexiglass walls.
  
• Department of Labor Initiatives. As mentioned above, the Biden administration wants to make it harder to classify workers as independent contractors. The Department of Labor may be working to rescind or at least revisit the Trump Administration’s Independent Contractor Guidance. They may implement an ABC, or 3-Prong Test. The other major change the Department of Labor will be probably make is it to take actions to increase liabilities for joint employers.
  
• FLSA revisions. The Biden administration will probably amend the job duties test for each employment category so that it’s harder to classify workers as exempt. They are also projected to try to increase the minimum salary for exempt workers.
  
• Increasing OSHA’s power. Biden’s administration will name a Secretary for OSHA, which Trump never did. They have also said they’d like to double the number of investigators, thus improving workplace safety (particularly in the pandemic).
  
• More business regulation via the National Labor Relations Board. The National Labor Relations Board (or NLRB) was particularly active in enforcing policies and practices for employee handbooks, workplace conditions and employee rights during the Obama administration. The same is likely to occur when Biden is president.
  
• EEOC agenda. Though the EEOC is generally bipartisan, they may do some things a bit differently under a Biden administration. They will work towards increasing “conciliation” options for workplace discrimination, as well as approving incentives for workplaces to create wellness initiatives. (Though this change has already happened, it’s worth noting that there will be no required EEO-1 filing this year.)

State-Level HR Planning

There will also be changes at a state-level under the Biden administration that are likely to impact employers.

• Trends in state laws. Under a Biden administration, the states will be encouraged to create their own COVID notification procedures for employers. They’ll be encouraged to make laws limiting the power and enforceability of non-compete limitations. States will likely continue the nascent wave of paid leave and PFML legislation, as well as programs for paid and unpaid leave for victims of violent crimes and domestic abuse. Lastly, similarly to the projected federal changes, states will be encouraged to make their own laws that will make it more difficult for workers to be classified as independent contractors.
  
• Specific state laws to pay attention to. These laws, even if they don’t affect your organization now, may be harbingers of what’s to come.
  
  • California Prop. 22: This is one of the most heavily funded initiatives in the US right now. It pushes for a limited exemption of Assembly Bill 5, which will allow “Gig Work” drivers to remain as legitimate independent contractors in the state of California.
    
  • Florida will be increasing the minimum wage to $10 per hour on September 30, 2021. It will increase to $15 per hour by 2026, with annual inflation-based increases.
    
  • Recreational use marijuana laws were passed in 4 states: Arizona, New Jersey, Montana, and South Dakota. Employers should be revisiting or creating drug testing and use policies for the workplace.
    
  • Colorado has passed a new Paid Family Leave law that gives eligible workers up to 12 paid weeks for illness, the birth of child, or the adoption of a child. Taxes will be taken to fund it starting in 2023, while leave can be taken starting in 2024.

Tips for HR Planning

These are the ways MP’s HR consulting team suggests preparing for the potential changes in employer regulation that could come with a Biden-Harris administration.

• Review your employee handbooks and employee policies, especially regarding leaves and telecommuting. Leaves are likely to be expanded over the next four years and it will be important to know who oversees administrating them, how they will be applied for, documented, etc.
  
• Keep an eye on COVID developments, especially at a state level. There may be new laws and requirements that should be adopted in the workplace. Travel orders will also affect employers when workers travel (or don’t) for business or pleasure.
  
• Review job descriptions and ensure all workers are correctly classified. There will be more and more penalties for doing this incorrectly. It will also help to reclassify workers if regulations change if this has already been done and documented.
  
• Keep up with MP. We’ll be updating employers on new requirements and laws that may affect them. It may also make sense to consider working with MP for HR services. We pride ourselves on proactively consulting with clients to ensure that they’re in compliance.