A number of significant employment policies will be implemented by the Biden administration and a Democratic-led U.S. labour board in 2023, but they risk being thwarted by opposition from business organisations and Republican-led states that have criticised the policies.
The following laws are likely to be the subject of legal challenges in the coming year, including assertions that federal agencies had no justification for abandoning Trump-era regulations seen as favouring corporations and anti-union employees.
The U.S. Department of Labor unveiled a proposal in October to make it harder for businesses to treat employees as independent contractors, a change that is anticipated to upend the ride-hailing, delivery, and other gig economy-dependent industries.
According to the proposal, when a worker is “economically dependent” on a business, they must be treated as employees, giving them access to more benefits and legal protections than contractors. The majority of federal and state labour laws only apply to employees of a company, who studies suggest can cost employers up to 30% more than independent contractors.
The final rule, which is anticipated in the spring, would replace a regulation from the Trump administration that states that employees who run their own businesses or have the ability to work for rival companies, like a driver,
Lawsuits opposing the new rule will probably centre on the stark departure from the Trump-era standard. Federal law mandates that agencies provide a sufficient justification for their decision to repeal and replace existing regulations. Businesses and trade associations are also likely to criticise the new rule’s content, claiming that the way it defines employment conflicts with federal law and leaves many workers’ legal statuses unclear.
The National Labor Relations Board, an independent body with a majority of Democrats, moved in September to make it simpler for employees and unions to hold corporations accountable for labour law violations by their franchisees and contractors, proposing to reinstate an Obama-era standard that has been roundly criticised by trade groups.
The rule would treat businesses that have indirect control over working conditions like scheduling, hiring and firing, and supervision as so-called “joint employers” under federal labour law. Companies had to have “direct and immediate” control, according to a rule the board adopted in 2020 when it had a majority of Republican appointees. This rule, however, was later overturned in court.
The new proposal, which will be finalised in the upcoming year, would have a significant impact on franchises like McDonald’s Corp., which are typically not involved in the day-to-day workplace issues of franchisees, as well as on sectors like manufacturing and construction that heavily rely on staffing agencies and contractors to provide workers.
Legal challenges to the rule are likely to argue that the board’s more restrictive interpretation of joint employment was more in line with federal labour law and that the new rule will confuse employees and undermine collective bargaining by making it unclear which businesses are responsible for various workplace issues.
